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FOREIGN  TRADE 

MARKETS  AND  METHODS 


BY 

CLAYTON  SEDGWICK  COOPER 

AUTHOR    OF    "  UNDERSTANDING    SOUTH    AMERICA," 
"the  BBAZIUAN8  AND  THEIR  COUNTBY,"  ETC. 


D.   APPLETON  AND  COMPANY 

NEW  YORK      ::      1922      ::      LONDON 


COPYRIGHT,   1922,   BY 

D.  APPLETON  AND  COMPANY 


FUNTED  Xti  THK  UNIT£D  STATES  OV  AUKUCA 


PREFACE 

In  the  following  pages  it  has  been  attempted  to  present 
somewhat  specifically  ''the  how"  and  "the  where"  of 
foreign  trade. 

Attention  has  been  given,  moreover,  not  only  to  markets 
and  methods,  but  also  to  the  peoples  themselves  with 
whom  we  are  dealing  and  with  whom  our  international 
commercial  relations  are  certain  to  be  increasingly  in- 
timate as  the  years  pass.  H.  G.  Wells  has  said,  "The  last 
decision  and  the  greatest  decision  lies  in  the  hearts  and 
wills  of  incalculable  men."  Success  in  overseas  trade 
pivots  upon  the  men  who  do  the  trading.  The  point  of 
view,  the  temper,  the  general  traits  of  the  foreigner  him- 
self, our  prospective  customer  or  seller,  are  as  necessary 
to  know  as  the  world's  markets  and  the  business  pro- 
cedure in  shipping  and  merchandising  a  product  overseas. 

The  means  by  which  men  may  be  prepared  for  inter- 
national commerce  have  been  emphasized  also  at  some 
length,  since  no  more  vital  subject  now  confronts  us  as 
a  people  than  the  fitting  of  our  youth  to  meet  the  com- 
petitive requirements  of  commerce  in  South  America,  in 
Europe  and  in  Africa  and  Asia.  To  discover  and  to  train 
men  for  trade  abroad  is  to-day  one  of  the  chief  American 
tasks.  We  must  have  trained  men  to  man  our  ships  and 
to  pioneer  our  banking  activities  abroad.  There  is  need 
of  trained  merchants,  trained  technicians  and  mechanical 
experts,  and  well-equipped  salesmen  who  have  learned 
to  adjust  their  abilities  to  the  desires  and  even  whims 
of  foreign  peoples,  whose  traits  and  business  procedure 
are  utterly  diverse  from  our  own. 


vi  PREFACE 

These  foreign  trade  representatives  must  be  of  a  higher 
type  than  formerly — quality  bulks  big  at  present.  World 
markets  are  not  ours  merely  for  the  asking.  These  must 
be  won  by  men  prepared  in  a  new  school  of  business, 
men  whose  gentlemanhood,  geographical  knowledge,  and 
the  grasp  of  world  politics  and  racial  relationships  are 
equal  to  their  knowledge  of  particular  lines  of  trade. 

That  some  of  our  largest  houses  doing  export  business 
overseas,  as  well  as  our  manufacturers  and  educational 
institutions,  have  recognized  this  fact  and  are  now  carry- 
ing on  regular  courses  for  training  to  fit  men  and  also 
women  for  this  new  era  in  our  commercial  progress,  is 
a  sign  of  encouragement.  Upon  no  other  foundation  than 
that  of  intelligence  and  adequate  preparation  can  we  as 
a  nation  expect  to  take  our  "place  in  the  sun"  in  com- 
petition with  the  experienced  nationals,  whose  progress 
for  generations  has  depended  upon  their  astute  exploita- 
tion and  successful  retention  of  world  markets. 

Clayton  Sedwick  Cooper, 
new  york  city 


CONTENTS 


I.    FoEEiGN  Trade  Requirements 1 

Influence  of  wars  upon  American  trade  abroad 
— New  world  consciousness  on  the  part  of 
American  business  men — American  manufac- 
turers require  foreign  markets — Necessity  of 
geographical  and  trade  knowledge — Some  fun- 
damental essentials  for  success — Mental  point 
of  view  of  the  buyer  in  foreign  lands — Recip- 
rocal trade — Transportation — Financial  facili- 
ties— Team-play  and  cooperation — Eliminating 
homecompetition — The  salesman's  opportunity. 

n.    EInowing  the  Export  Business 12 

Trade  statistics  revealing  enormous  growth  of 
new  methods  being  adopted — The  export  mer- 
chant's qualifications  and  difficulties — Commis- 
sion houses — Direct  exporting — The  export 
manager — Seeing  things  "in  the  big" — Neces- 
sity of  manufacturers'  personal  contact  with 
field — Practical  idealism. 

III.  Foreign  Salesmanship  asi  a  Career  .  .  .  ,  28 
A  new  opportunity  for  best  trained  men  only — 
Natural  qualifications — ^Necessary  equipment 
includes  intimate  knowledge  of  industrial  and 
financial  conditions  at  home — "Manners  maketh 
the  man" — Becoming  specialists  on  a  single 
country — The  foreign  salesman's  decalogue. 

IV.    Export  Advertising:  Its  Necessity  and  How 

Accomplished 41 

How  foreign  advertising  differs  from  home  ad- 
vertising— Adapting  advertising  to  the  tastes 
of  the  country — Understanding  surface  differ- 
ences and  racial  and  temperamental  traits-— 
Advertising  by  letter — Local  advertising  in 
foreign  markets. 


viii  CONTENTS 

V.    Training  for  Foreign  Commerce 51 

New  demand  for  properly  fitted  men — ^Where 
training  information  can  be  gained — Advan- 
tages of  college  education — Business  procedure 
necessary  to  be  acquired — Vocational  study — 
Practical  methods  of  training  used  in  business 
houses,  banks,  and  colleges. 

VI.    Literature  and  Study  Courses  for  Foreign 

Trade  Representatives 101 

Foreign  trade  conference  classes — Courses 
given  in  business  houses — Suggestive  course  of 
study  on  sales  practice — Foreign  advertising 
courses — General  readings  on  Latin  America 
and  a  worldwide  trade  bibliography. 

VII.    American     Shipping     and     Our     Merchant 

Marine 125 

American  shipping,  its  evolution  from  clipper 
ship  days  to  the  present — The  world's  mer- 
chant marine  tonnage  in  1934 — War  losses  in 
ships — Shipbuilding  in  different  nations — 
Shipping  legislation  needed — Views  of  ship- 
ping men — The  need  of  a  great  American 
maritime  leader. 

VIII.    Marine  Insurance 138 

What  is  usually  meant  by  marine  insurance — 
Discussion  of  the  most  common  insurance 
clauses  with  explanation  of  each — Under- 
writers' responsibility — Carriers'  responsibility 
— Speciali2;ation ;  claims  and  promises  necessary 
for  manufacturers  and  traders  in  order  to 
secure  marine  insurance  protection. 

IX.  Cables:  The  Nerves  of  Foreign  Trade  .  .  .  146 
Facts  relative  to  the  history  of  cable  service 
and  the  progress  of  cable  communication — 
How  cable  service  ministers  to  international 
trade — Construction  of  cables — Inter-America 
cables — Tlie  All  America  Cables  as  an  example 
of  the  progressive  spirit  of  communication  be- 
tween North  and  South  America — The  art  of 
using  cables — Summary  of  improvements — 
Private  and  nationally  owned  cables. 


CONTENTS  ix 

X.    Financing  Foreign  Trade 171 

American  banks  abroad — Financing  foreign 
shipments — Credit  versus  cash  policy — Pay- 
ments— Detailed  steps  in  an  exchange  transac- 
tion. 

XI.    Importance  and  Advantages  op  Knowing  Com- 
mercial Languages 185 

Worldwide  desire  to  learn  English — Necessary 
commercial  languages — Where  French,  Span- 
ish, Portuguese  and  other  languages  are  needed 
— Discoveries  along  the  route  of  langxiage 
study — How  commercial  languages  can  be 
mastered — Suggestive  list  of  books  for  acquir- 
ing different  languages. 

XII.  Definitions  of  Foreign  Trade  Terms  .  .  .  205 
The  findings  of  the  National  Foreign  Trade 
Council  relative  to  terms  used  in  overseas 
commerce — Necessity  of  mutual  understanding 
in  the  uniformity  of  terms  like  F.O.B.,  C.I.F., 
etc. — Definitions  of  export  quotations  with  ex- 
plicit directions  for  sellers  and  buyers — Re- 
sponsibility of  both  merchants  and  exporters 
in  shipping,  freight  and  insurance  matters. 

XIII.  The  House  Organ  in  Foreign  Trade   ....    219 

Purpose  and  policy  of  the  corporation  maga- 
zine— Result  of  questionnaire  concerning  the 
work  of  house  organs  among  leading  American 
firms  engaged  in  foreign  trade — Educational 
values — The  editorial  function — Correspond- 
ents and  photogTaphs — Publishing  costs — Dif- 
ficulties confronting  the  house  organ  editor. 

XIV.  Newspapers  and  Periodicals  as  Foreign  Trade 

Builders 238 

The  work  of  the  American  press  in  foreign 
trade  propaganda — Necessity  of  overcoming 
adverse  criticism  of  the  United  States  in  for- 
eign countries  by  presenting  in  the  foreign 
press  the  true  attitude  of  American  manu- 
facturers— Periodicals  used  successfully  for 
foreign  trade  exploitation — Export  trade  jour- 
nals— Local  foreign  media  with  a  list  of  au- 
thoritative periodicals  in  the  leading  world's 


c  CONTENTS 

markets.  Mediums  described  and  explained 
according  to  the  nature  of  products  they  are 
best  fitted  to  present  to  foreign  customers. 

XV.  Diplomatic  and  Consular  Service  .....  250 
The  new  demand  for  commercial  statesmen — 
Functions  of  Ambassadors  and  Ministers — ■ 
The  work  of  the  American  Consul,  his  duties 
given  in  detail — How  the  American  manufac- 
turer and  exporter  should  cooperate  with  our 
consular  and  diplomatic  officers — The  Consul's 
responsibility  to  Government  departments — 
Our  foreign  Government  representatives  as  re- 
lated to  travelers,  tourists  and  business  firms 
— Suggestive  experience  of  European  nations 
cited  relative  to  the  work  of  diplomatic  and 
consular  officers  abroad. 

XVI.  Mutual  Markets  between  the  United  States 

AND  Japan 259 

Influence  of  Japan's  victory  over  Russia — 
Japan  dependent  upon  foreign  business — The 
militaristic  versus  democratic  policies — Signs 
of  liberalism — Factories  and  labor — Pan-Asian 
tendencies — Trade  with  the  United  States — Re- 
cent financial  conditions — Character  of  Jap- 
anese imports  into  the  United  States — Our  ex- 
ports to  Japan — Markets  mutually  necessary 
to  both  nations. 

XVII.  Strengthening  American  Trade  with  China    271 

Understanding  the  Chinese  people — Growth  of 
American  business  firms  in  China — Character 
of  market — Difficulties  confronting  American 
traders — China  Trade  Act — Histoiy  of  commer- 
cial relations  with  China — Trade  legislation  re- 
quired— Industry  exhibit  suggested — Making 
China  an  "open  door"  for  American  commerce. 

XVTII.    Trade  Possibilities  and  Industrial  Progress 

IN  the  Philippines 286 

"Westernization  of  the  Philippines — Chief  ex- 
ports and  imports — Results  of  the  war — Trade 
schools — Transportation  facilities  required — 
Labor  problems — Difficulties  of  legislation  at 
long  range  for  the  Philippines — The  American 
political  dilemma. 


CONTENTS  XI 

XIX.  American  Trade  with  India 295 

War  has  opened  new  trade  doors — Kind  of 
products  needed  and  principal  exports — Japa- 
nese activities  for  trade  with  India — The  East 
Indian  method  of  doing  business — ^Rules  for 
the  foreign  trader  in  India. 

XX.  Can  Trade  Westernize  Asia? 307 

Significance  of  Asiatic  races  in  world  trade — 
Inherent  national  differences  and  oriental  char- 
acteristics— England's  tasks  and  accomplisli- 
ments — External  rather  than  spiritual  recon- 
struction. 

XXI.    Our  Trade  in  the  Near  East 321 

How  America  has  laid  foundations  for  Medi- 
terranean commerce — Why  the  United  States 
holds  the  confidence  of  near  Eastern  countries 
— Rich  resources  of  the  near  Eastern  countries 
• — Our  trade  accomplishments  in  the  past 
largely  without  American  shipping — New  con- 
tracts during  and  since  the  war — Markets  in 
Egypt,  Turkey,  Asia,  the  Caucasus,  Greece, 
and  the  Balkan  regions — American  responsi- 
bility in  developing  Mediterranean  markets. 

XXII.  American  Overseas  Trade  with  Africa  .  .  .  333 
The  awakening  of  Egypt — The  new  spirit  of 
the  fellaheen — Imports  and  exports  of  Egypt 
— Algerian  development  under  French  leader- 
ship— Resources  and  economic  conditions  of 
South  Africa — Trade  development  in  the 
Union  of  South  Africa — American  chamber 
of  commerce  in  South  Africa — Industrial  de- 
velopment— Work  of  American  engineers  and 
business  men — The  Belgian  Congo — American 
business  in  central  West  Africa. 

XXIII.  American  Commerce  with  Russia  ....  348 
Uncertainty  of  present  trade  situation — State- 
ment of  American  policy  by  Secretary  of  State 
Hughes — Preparing  for  Russia's  prospective 
markets — Germany's  position  in  Russian  mar- 
kets— Credit  difficulties — Russia's  agricultural 
and  industrial  possibilities — Railroads  needed 


xii  CONTENTS 

— The  timber  industry — Mistake  of  sending  in- 
ferior men  as  representatives — Suggestions 
for  salesmen — Necessary  to  prepare  now  for 
entering  Russian  markets'. 

XXIV.    Markets  with  the  United  Kingdom^  Canada 

AND  Australia 359 

Great  Britain  as  a  pioneer  in  overseas  com- 
merce— Reasons  for  her  prestige  in  her  mer- 
chant marine  and  manufacturing  genius, 
colonizing  capacity  and  coal  supply — Her 
financial  accomplishments  in  foreign  trade — 
Protecting  the  rights  of  her  subjects — A  settled 
trade  policy — Markets  between  Great  Britain 
and  the  United  States — British  investments  in 
foreign  lands  as  a  means  for  developing  trade 
— Canadian  markets — Reasons  for  Canada's 
large  trade  with  the  United  States — Forest  re- 
sources— Export  and  import  statistics — Aus- 
tralian markets — Chief  exports  and  industries 
— Trade  with  the  United  States, 

XXV.    Understanding  Britishers:  A  Necessity  for 

Successful  Intertrade  Relations  .  .  .  369 
Necessity  for  successful  intertrade  relations — 
Study  of  American  and  English  characteristics 
as  revealed  in  trade — Necessity  of  understand- 
ing differences  of  temperament  and  ideals — 
Reserve  versus  enthusiasm — Necessary  for  the 
American  to  understand  English  eonserv^atism 
— American  adaptability  an  advantage  in  trade 
relations — Influence  of  education  upon  national 
temperament — Mutual  understanding  of  Brit- 
ish and  Americans  a  vital  factor  in  worldwide 
trade  accomplisliments. 

XXVI.    Trade  with  the  New  Europe 385 

Outstanding  features  of  new  European  markets 
— New  trade  with  Austria-Hungary,  Czecho- 
slovakia and  Baltic  States — North  Mediterra- 
nean coast  trade  increasing — Belgium  mai'kets 
— United  States  trade  with  France — Italy's  in- 
dustrial progress  and  future  prospects 
through  new  territory  acquired  in  the  war — 
Spain's  trade  with  the  United  States — Com- 
merce with  Portugal. 


CONTENTS 


Xlll 


XXVII.    Caribbean  Markets 391 

Proximit}'  a  factor  in  overseas  commerce — 
Mexican  resources — Export  and  import  condi- 
tions— Cuba:  "the  world's  sugar  bowl" — An 
increasingly  large  market  for  the  United  States 
— Markets  with  Porto  Rico,  Haiti,  and  San  Do- 
mingo— American  business-hold  upon  the  Cen- 
tral American  Republics — The  land  of  the 
banana — An  example  of  American  vision  and 
industry  in  Central  America  in  industrial  pro- 
duction. 

XXVIII.    Winning  South  American  Trade 402 

How  alone  South  American  trade  can  be  won 
— Assistance  of  the  Webb  Law  and  Edge  Act 
to  American  manufacturers — The  Panama 
Canal  as  a  vital  factor — Service  and  capital  as 
prime  requirements — Foreign  investments  and 
accomplishments  in  South  America — Reasons 
for  South  American  dependence  upon  foreign 
initiative — Chief  products  of  South  American 
export — Things  that  South  America  imports — 
Meeting  European  competition — Following  up 
the  admiration  gained  for  us  by  South  Amer- 
ica during  the  war — Careful  attention  to  de- 
tails in  adjusting  business  relations  with  South 
America. 

XXIX.    Carrying  American  Idealsi  along  the  Routes 

OF  World  Trade 420 

The  personality  of  the  business  man  as  a  factor 
in  world  trade — Is  American  idealism  being 
earned  with  trade  methods  into  world  mar- 
kets ? — The  Americans  as  utilitarian  idealists — 
"The  square  deal,  both  ways"  applied  to 
foreign  trade — America's  unexampled  oppor- 
tunity in  world  affairs. 


Index 


429 


ILLUSTRATIONS 


PACING 
PA.QE 


A     CACAO     TREE     ON     A     BRITISH     WEST     AFRICAN     PLANTA- 
TION     Frontispiece 

Along  the  canals  of  china 32 

Transportation  of  hides  in  the  streets  of  Calcutta,  india  32 

A  BUSY  corner  on  the  pier  of  one  of  the  large  AMERICAN 

international  merchandising  companies     ....  33 

In  the  DATS  of  the  '^clipper  ships'^  off  the  coast  op 

PERU  IN  1865 126 

Grain  elevators  and  docks  at  buenos  aires'    ....  127 

Ceylonese  workmen  handling  tea  chests 260 

A  picturesque  group  of  tea  pickers 261 

The  first  lap  in  the  journey  of  ceylon  tea  to  America  280 

Coolies    carrying    chests    of   goods    on    the    hankow 

water  front 281 

Gathering  grapes  in  a  large  Brazilian  vineyard    .    .    .  338 

A  market  at  ACCRA,  BRITISH   WEST  AFRICA 339 

Spinning  wool  and  weaving  cashmere  shawls    ....  352 

Russian  cloth  market 353 

A  lumber  railway  piercing  a  BRAZILIAN  JUNGLE  ....  404 

Transporting  wheat  from  one  of  the  large  haciendas 

in  argentina 405 


X7 


FOREIGN  TRADE 

MARKETS  AND  METHODS 

CHAPTER   I 

FOREIGN  TRADE  REQUIREMENTS 

Trade  is  Peace. — Ex-President  Taft. 

Wars  have  had  direct  and  far-reaching  influence  upon 
American  foreign  trade.  It  was  during  the  Napoleonic 
wars,  lasting  upwards  of  twenty  years,  that  young  America 
obtained  and  accepted  her  first  opportunity  to  enlarge 
her  trade  to  world  proportions,  building  up  her  mer-' 
cantile  sailing  fleet  until  between  the  years  1800  and  1830 
we  carried  in  American  ships  upwards  of  90  per  cent 
of  all  our  foreign  trade  products.  The  Civil  War,  or 
rather  the  sectional  differences  between  the  South  and 
North  preceding  this  war,  were  largely  instrumental  in 
demolishing  the  Government  subsidies  given  to  trans- 
atlantic shipping  and  in  fettering  northern  shipbuilding 
and  giving  an  open  door  to  the  competitive  trade  of 
foreign  shippers  in  our  markets.  Our  war  with  Spain 
not  only  gave  us  new  interests  in  Cuba  and  the  West 
Indies  but  it  extended  our  trade  responsibilities  in  the 
Orient  and  served  as  an  entering  wedge  to  new  com- 
mercial adjustments  with  Asia.  The  European  or  World 
War,  even  more  decidedly  than  any  former  conflict,  has 
served  to  break  the  traditional  geographical  and  industrial 
isolation  of  the  United  States,  accomplishing  in  such  lines 
as  shipbuilding,  finance  and  scientific  industry,  results 
that  have  amazed  our  own  countrymen  and  placed  us 


2  FOREIGN  TRADE  MARKETS  AND  METHODS 

under  direct  obligation  and  necessity  for  a  greatly  en- 
larged foreign  commerce. 

What  years  of  propaganda,  literary  and  political,  have 
failed  to  accomplish  in  the  way  of  building  up  a  new 
merchant  marine,  the  war  has  accomplished  at  a  single 
stroke,  and  American  ships  again  are  found  upon 
the  **seven  seas."  Our  country  through  the  exigencies 
of  war  has  become  the  creditor  nation  of  the  world  and 
by  reason  of  our  characteristic  material  accomplishment 
in  technical  and  industrial  construction,  together  with 
our  financial  precedence,  we  have  become  involved  respon- 
sibly in  organizations  intrusted  with  the  reconstruction 
of  large  portions  of  Europe.  Our  greatly  enlarged  activi- 
ties in  Latin  America  during  war  time,  and  particularly 
in  view  of  the  greater  shipping  facilities  utilized  with  our 
southern  neighbors,  have  brought  about  a  new  era  of 
trade  opportunity  on  this  continent,  while  in  a  manner 
never  known  before,  the  widening  of  the  horizon  of  our 
people  by  reason  of  knowledge  and  experience,  particu- 
larly in  the  European  conflict,  has  brought  us  into  new 
trade  relationships  with  Africa  and  the  Orient. 

That  foreign  trade  is  absolutely  essential  to  furnish  a 
field  for  our  growing  manufactured  products  is  vividly 
shown  by  a  statement  made  recently  by  Mr.  0.  P.  Austin, 
statistician  of  the  National  City  Bank  of  New  York : 

United  States  manufacturers  broke  their  own  record  and  the 
world's  record  in  the  value  of  manufactures  turned  out  in  1919. 
Preliminary  fig-ures  of  the  1920  census  covering  the  value  of  aU 
manufactures  produced  by  the  factories  of  the  United  States  in 
the  calendar  year  1919  show  a  grand  total  of  $62,500,000,000,  as 
the  gross  value  of  the  1919  output,  against  $24,250,000,000  in 
1914;  $20,500,000,000  in  1909;  $14,750,000,000  in  1904,  and 
$11,500,000,000  in  1899.  The  value  of  the  1919  output  is  two  and 
one-half  times  as  much  as  that  of  1914,  over  three  times  that  of 
1909,  four  times  that  of  1905  and  more  than  five  times  that  of 
1899,  only  twenty  years  earlier.  The  increase  in  the  five-year- 
census  period,  1914-1919,  was  158  per  cent  against  an  average 
quinquennial  increase  of  28  per  cent  in  the  preceding  five-year 


FOREIGN  TRADE  REQUIREMENTS  3 

periods  represented  by  the  census  reports  from  1899  to  1914. 
The  highest  percentage  of  gain  in  value  of  manufactures  turned 
out  in  any  of  the  preceding  quinquennial  periods  was  that  of 
1904-1909,  in  which  the  increase  was  39.6  per  cent  as  against  158.1 
per  cent  in  the  quinquennium  1914-1919. 

Not  only  is  the  value  of  our  output  of  manufactures  in  this 
latest  census  record  by  far  the  "biggest  ever,"  but  it  means  that 
we  are  now  producing  a  much  larger  share  of  world  manufactures 
than  ever  before  and  at  least  twice  as  much  as  that  of  any  other 
country  of  the  world.  Prior  to  the  wai',  we  were  producing  about 
30  per  cent  of  the  factory  output  of  the  world,  our  total  as  shown 
by  the  1909  census,  having  been  $20,000,000,000,  the  United  King- 
dom and  Germany  at  that  date  estimated  at  $9,000,000,000  each; 
France  $7,000,000,000,  and  the  factory  output  of  the  remainder 
of  the  world  $20,000,000,000,  making  the  estimated  value  of  world 
factory  output  in  1910  at  approximately  $65,000,000,000,  of 
which  we  supplied  $20,000,000,000,  or  about  30  per  cent  of  the 
total.  Now  our  latest  official  record,  covering  the  output  of  the 
year  1919,  shows  our  own  total  at  $62,500,000,000,  or  nearly  as 
great  as  that  of  the  entire  world  a  decade  earliei',  while  the  best 
estimates  obtainable  for  the  outturn  of  other  countries  suggest 
that  our  share  of  world  output  of  manufactures  in  1919,  the  year 
following  the  close  of  the  war,  was  rather  more  than  40  per 
cent,  as  against  30  per  cent  in  the  period  immediately  preceding 
the  war. 

It  is  unnecessary  to  go  further  into  a  statement  of  our 
opportunities,  or  to  emphasize  the  fact  that  this  new 
after-war  period  is  to  furnish  the  arena  in  which  the 
United  States  is  to  prove  for  many  years  to  come  whether 
she  is  to  become  a  leading  world  factor  in  trade,  or  is  to 
drop  back  to  her  original  position  of  third  or  fourth  or 
fifth  place  among  nations  in  foreign  business. 

To-day  our  men  of  affairs,  manufacturers,  merchants, 
political  leaders,  financiers  and  mariners  are  becoming 
conscious  of  the  fact  that  we  are  at  the  threshold  of 
a  great  possible  enterprise  in  American  foreign  trade. 
The  ground  has  been  cleared  for  action  but  the  battle 
has  not  been  won;  indeed,  it  has  hardly  been  begun. 
During  the  next  decade  the  United  States  will  be  chal- 


4  FOREIGN  TRADE  MARKETS  AND  METHODS 

lenged  to  prove  her  ability  to  add  to  her  achievement 
at  home  quite  as  great  achievements  in  extending  her 
genius  and  talents  for  trade  and  industry  abroad. 

In  view  of  the  momentous  issues  it  is  well  to  have  in 
mind  the  essential  requirements  which  we  shall  be  called 
upon  to  meet  to  compete  successfully  with  other  foreign 
traders. 

Whether  a  man  be  a  manufacturer,  a  steamship  man, 
an  advertiser  or  a  banker,  a  salesman  or  a  manager  in 
a  foreign  office,  it  is  essential  to  remember  that  no  in- 
genious methods  or  tactics  of  trade  can  possibly  substitute 
for  a  broad  knowledge  of  foreign  peoples  and  an  ability 
to  adapt  our  plans  to  the  requirements  of  business  in 
these  lands.  This  will  require  brain  power  as  well  as 
activity.  "We  are  inclined  to  emphasize  in  this  country 
physical  activity  and  hustle  at  the  expense  of  ideas  and 
mental  leadership.  It  is  possible  to  be  ever  so  energetic 
and  yet  lose  our  customers  because  we  fail  to  think  in 
their  terms. 

Our  geographical  knowledge  is  lamentably  scant.  Dur- 
ing a  visit  to  South  America  not  long  ago  we  discovered 
an  American  automobile  firm  about  to  establish  its  cen- 
tral office  for  South  America  in  Quito,  Ecuador,  under 
the  apprehension  by  looking  at  the  map,  that  this  would 
be  a  suitable  central  place  for  reaching  all  parts  of  the 
West  Coast.  Another  manufacturer  cabled  his  agent  at 
Buenos  Aires  to  run  up  to  Para,  Brazil,  over  tlie  week-end 
for  the  purpose  of  closing  a  business  deal,  thinking  that 
the  agent  could  easily  get  back  to  Buenos  Aires  by  the 
middle  of  the  next  week.  This  somewhat  juvenile  ignorance 
of  distances  did  not  take  into  the  reckoning  the  fact  that 
the  agent  would  consume  ordinarily  not  less  than  ten  days 
simply  in  travel  one  way  between  Buenos  Aires  and  Para. 
This  ignorance  of  places  and  distances  was  almost  as  im- 
pregnable as  that  of  a  certain  young  would-be  trader  who 
asked  the  writer  a  few  years  ago  if  Thibet  was  in  Egypt. 

A  letter  came  to  us  not  long  ago  from  a  man  wishing  to 
go  to  Brazil  to  engage  in  the  chemical  line.     He  stated 


FOREIGN  TRADE  REQUIREMENTS  5 

that  he  had  a  knowledge  of  Spanish  and  French  but  that 

he  understood  German  was  spoken  to  a  considerable  extent 
in  Brazil,  inquiring  wliether  we  thought  lie  should  master 
German  before  going  to  this  country.  Upon  inquiring 
whether  he  knew  Portuguese,  which,  of  course,  is  the 
language  of  Brazil,  we  discovered  that  this  subject  had 
never  occurred  to  him. 

Furthermore,  no  trader  is  fitted  to  build  up  a  business  in 
a  foreign  country  unless  he  has  studied  somewhat  the 
historical  background  of  that  country.  "What  is  the  tem- 
perament of  the  people  due  to  racial  or  hereditary  influ- 
ences? What  kind  of  methods  and  what  sort  of  persons 
using  these  methods  are  acceptable  in  their  eyes?  What 
competition  must  be  met  ?  How  about  commercial  treaties, 
social  customs,  methods  of  payment  and  political  stability 
of  the  country?  To  lunge  into  foreign  trade  without  such 
knowledge  is  suicidal.  It  would  be  like  the  manufacturer 
who  sent  a  large  shipment  of  pocket-knives  to  China  only 
to  learn  later  that  the  Chinese  had  no  pockets  in  their 
clothes.  An  old  college  president  once  said  to  a  prospective 
graduate  about  to  engage  in  business: 

Your  first  asset  is  the  ability  to  get  the  point  of  view  of  your 
customer.    Without  that  everything  else  is  useless. 

A  first  principle  of  successful  business  abroad  is  what 
Confucius  used  to  call  "mental  hospitality" — the  faculty 
of  projecting  your  imagination  into  the  viewpoint  of  the 
people  with  whom  you  are  to  deal.  This  means  the  doing 
away  with  preconceived  prejudices  and  suggests  the  acquir- 
ing of  what  President  Butler  of  Columbia  University  has 
called  the  ''international  mind."  A  generous  hospitality 
of  mind  and  spirit  toward  people  with  traditions  and  ideas 
quite  different  from  our  own,  a  striving  to  be  simpatico  as 
they  say  in  Latin  America — these  are  indispensable  con- 
ditions of  success  in  foreign  enterprises. 

There  is  something  more  required  of  the  foreign  mer- 
chant than  the  qualifications  of  a  merchant  at  home.  He 
must  be  more  than  a  manufacturer  or  a  banker,  since  this 


6  FOREIGN  TRADE  MARKETS  AND  METHODS 

merchant  must  have  a  wide  knowledge  of  international 
business  and  be  possessed  of  the  faculty  of  foresight,  and 
more  than  all,  possess  the  ability  of  keeping  the  customer 
in  mind.  A  banker's  problems  are  comparatively  easy, 
providing  he  holds  to  a  conservative  policy  in  granting 
credits.  The  foreign  merchant,  if  he  is  an  exporter,  must 
keep  in  mind  the  man  to  whom  he  sells  goods  as  the  chief 
subject  of  his  thought.  He  is  dealing  in  exporting  with 
individuals.  In  importing,  on  the  other  hand,  it  is  a  sub- 
ject of  merchandise,  the  goods,  that  the  merchant  must  have 
foremost  in  his  thoughts.  In  all  of  these  matters,  however, 
one  of  his  first  ideals  must  be  the  rendering  of  service.  He 
is  not  carrying  on  a  one-sided  transaction.  Foreign  trade 
means  something  to  sell  and  also  something  to  buy. 

An  example  of  what  is  meant  by  service  came  to  our 
notice  recently  from  an  experienced  exporter.  He  cited  a 
transaction  with  a  large  customer  in  Ecuador,  who,  among 
other  items,  ordered  a  number  of  cases  containing  porous 
piaster,  but  in  giving  contents  of  the  cases  stated  boxes  by 
the  gross  instead  of  by  dozens.  The  man  receiving  the 
order  concluded  that  the  customer  had  ordered  enough 
plasters  to  supply  the  whole  of  Ecuador  for  years,  and  feel- 
ing that  there  must  be  some  mistake,  shipped  one-twelfth 
of  the  order,  calling  the  attention  of  the  customer  to  what 
was  thought  to  be  a  mistake  and  stating  that  if  the  entire 
order  was  wanted  the  customer  should  cable  at  the  export- 
er's expense.  This  act  of  consideration  on  the  part  of  the 
exporting  house  so  pleased  the  Ecuadorian  customer  that 
he  became  attached  to  this  New  York  house  permanently 
and,  in  fact,  never  bought  goods  from  any  one  else  after 
this  act  of  consideration. 

Trade  is  what  the  word  signifies — a  reciprocal  process, 
importing  as  well  as  exporting.  It  has  two  sides  and  there 
are  two  parties  involved :  the  rights  and  needs  of  both  must 
be  taken  into  consideration.  The  necessity  of  buying  as 
well  as  selling  was  brought  to  attention  vividly  after  the 
World  War  when  our  export  trade  balance  piled  up  at 
the  rate  of  four  billions  of  dollars  a  year  with  all  the 


FOREIGN  TRADE  REQUIREMENTS  7 

dangerous  consequences  attendant  upon  this  one-sided  ar- 
rangement. During  the  last  part  of  1920  and  in  the  year 
1921,  the  depression  in  foreign  business  consequent  upon 
foreign  exchange  and  falling  prices  has  brought  out  even 
more  vividly  that  no  country  lives  to  itself  alone.  As  this 
is  being  written  it  is  estimated  that  upwards  of  50,000,000 
tons  of  American  goods  are  lying  in  Latin-American  ware- 
houses, the  buyers  refusing  to  accept  them  and  pay  stip- 
ulated prices  because  of  the  fall  in  exchange  in  nearly  all 
these  South  American  countries  since  the  trade  transactions 
were  made.  To  fulfill  the  original  contracts  would  mean 
financial  ruin  doubtless  to  many  a  foreign  firm.  The  situa- 
tion both  at  home  and  abroad  has  emphasized  the  fact  that 
trade  is  consequent  upon  conditions  and  circumstances  not 
alone  in  the  selling  country  but  in  the  purchasing  country 
as  well,  A  wise,  far-seeing  merchant  must  make  certain  of 
his  customer's  ability  to  pay  and  also  have  the  vision  to  see 
tendencies  and  guard  both  himself  and  his  customers 
against  such  world-wide  business  calamities  as  the  depres- 
sion of  1920  and  1921  witnessed.  To  make  trade  reciprocal 
and  successful  the  home  merchant  must  know  and  be  pre- 
pared to  help  his  foreign  client  and  customer.  Service  is  a 
big  word  in  overseas  commerce.  It  is  a  potent  means  for 
assuring  trade  reciprocity. 

The  war  has  startled  us  into  the  realization  of  the  vital 
necessity  of  sea  power.  Transportation  is  the  twin  brother 
of  trade.  A  country  may  have  mines  and  products  of  the 
soil  in  abundance,  but  without  railroads  and  ships  may  be 
profited  only  slightly  by  this  fact.  In  the  Philippines  we 
met  an  expert  in  the  lumber  business  who  had  been  sent  out 
there  to  investigate  the  field  for  a  large  syndicate  in  view  of 
the  investment  of  a  huge  sum  of  money  in  the  lumber  busi- 
ness in  these  islands.  This  expert  was  amazed  to  realize 
that  despite  the  large  timber  reserves  which  he  found,  he 
could  make  no  favorable  report  to  his  syndicate,  since  there 
was  no  possible  means  of  getting  this  timber  to  a  market 
port.  Brazil,  for  example,  has  inexhaustible  riches  of 
mines,  woods,  agricultural  and  grazing  possibilities,  but  her 


8  FOREIGN  TRADE  MARKETS  AND  METHODS 

vast  territory  is  now  locked  to  the  world  because  of  inade- 
quate means  of  getting  these  riches  out  to  the  seacoast. 
Eoads — country  roads,  railroads — ^these  are  indispensable 
requirements  for  foreign  trade. 

We  ought  not  to  forget  soon  the  fundamental  necessity 
which  for  four  years  was  drummed  into  our  ears  by  the 
slogan:  "Give  us  ships!"  There  are  many  indications 
pointing  to  the  fact  that  a  new  American  merchant  marine 
is  forthcoming.  Let  us  realize,  however,  that  this  is  not 
yet  an  accomplished  fact  and  that  if  attention  is  not  given 
in  the  near  future  to  legislation  which  will  make  it  possible 
for  American  ships  to  compete  with  English,  German, 
French,  Italian  and  Japanese  lines  much  of  our  prestige 
and  opportunity  during  and  immediately  after  the  war  will 
be  forfeited.  Our  provincialism  and  fear  of  entangling 
alliances,  together  with  lack  of  world  perspective  and 
knowledge  on  the  part  of  our  lawmakers  must  be  ehangt-d, 
and  speedily,  if  we  are  to  meet  the  requirements  of  the  new 
era. 

We  are  advancing  in  experience  at  present  relative  to 
the  matter  of  proper  facilities  such  as  our  own  banks  and 
the  establishment  of  our  own  offices,  and  the  proper  use  of 
such  agencies  as  commission  houses,  export  departments, 
marine  insurance,  traveling  salesmen  and  a  general  knowl- 
edge of  financial  matters  involved  in  credits,  trade 
acceptances,  merchandise  documents  and  other  m.eans 
familiar  to  our  trade  competitors  in  other  nations,  as  well 
as  such  details  as  packing,  marking  and  the  transportation 
of  our  goods.  The  National  City  Bank  has  led  the  way  in 
Latin  America  in  American  banking  matters  and  other  of 
our  banking  institutions,  notably  the  Guaranty  Trust  Com- 
pany, are  following  up  the  advantage  in  lessons  learned. 
American  chambers  of  commerce  in  foreign  cities  are 
helping  greatly.  That  we  have  yet  more  ground  to  cover 
along  each  of  these  lines  is  evident  to  any  one  who  happens 
to  attend  a  conference  or  convention  of  our  American  men 
of  business  whose  questions  concerning  the  fundamentals 
of  foreign  trade  reveal  the  unassailable  fact  that  our  men 


FOREIGN  TRADE  REQUIREMENTS  9 

of  affairs  have  achieved  their  reputation  for  business  almost 
entirely  at  home,  while  the  extension  of  this  business  to 
foreign  lands  is  yet  more  or  less  in  a  terra  incognita.  We 
have  the  raw  materials,  many  food  supplies  and  the  manu- 
factured products  which  all  the  world  needs ;  the  machinery 
for  selling  them,  transporting  them,  and  suiting  our  cus- 
tomers in  price  and  detail  is  yet  largely  to  be  supplied. 

Another  factor  which  has  far-reaching  influence  upon  a 
nation's  commercial  success  in  foreign  countries  has  been 
the  willingness  to  invest  capital  in  industrial  enterprises. 
The  opportunity  and  the  advantage  of  such  investment  was 
clearly  shown  recently  in  an  address  made  by  Mr.  John  S. 
Drum,  President  of  the  American  Bankers'  Association: 

It  is  useless  to  grow  commodities  we  cannot  nse  or  sell.  For- 
eign nations  which  need  our  commodities  have  only  one  thing  to 
sell  to  obtain  money  with  which  to  buy  our  goods — that  is,  securi- 
ties in  their  productive  enterprises.  And  we,  prominently  the 
creditor  nation  of  the  world,  are  the  one  people  who  can  invest 
in  those  productive  enterprises  of  other  nations  and  thus  enable 
them  to  trade  with  us. 

It  is  what  England  and  Holland  and  Belgium  and  France  and 
all  great  trading  nations  of  the  old  world  have  done  in  building 
up  markets  for  their  products.  Their  foreign  investments  enabled 
foreign  countries  to  produce  more  than  before  and  therefore  in- 
creased their  ability  to  buj'. 

None  ever  possessed  the  opportunity  that  is  ours  to-day.  By 
foreign  investment  we  may  help  them  to  restore  their  wealth 
destroyed  in  war  and  to  reduce  their  debts,  but  at  the  same  time 
we  shall  help  ourselves  even  more  bj'^  restoring  their  ability  to  buy 
our  goods  and  our  own  ability  to  dispose  of  our  excess  products. 

In  a  sense  which  it  is  difficult  to  obliterate,  trade  follows 
the  dollar.  The  European  nations  that  have  devoted  large 
investment  to  the  buildijig  of  railways  and  dock  improve- 
ments in  South  America  have  thereby  furnished  markets 
for  their  own  manufactured  products  and  secured  the  par- 
ticular good  will  of  the  country  in  which  the  investments 
have  been  made.  Foreign  investments  not  only  carry  with 
them  new  markets  for  our  gQods,  but  also  men  of  the  nations 


10         FOREIGN  TRADE  MARKETS  AND  METHODS 

investing  and  these  men  together  with  capital  produce  the 
ties  and  influential  relationships  conducive  to  the  future 
building  of  trade.  Undoubtedly  the  large  number  of  for- 
eign loans  which  have  been  finding  more  or  less  ready 
acceptance  in  the  United  States  since  the  war  wiU  add  a 
new  interest  upon  the  part  of  our  people  in  the  countries 
abroad  and  in  their  products  and  progress.  Furthermore, 
financial  investment  in  most  of  the  countries  of  Latin 
America  at  present  is  not  only  safe  investment  but  in  many 
cases  bears  the  promise  of  being  more  profitable  than  many 
investments  at  home. 

Provided  the  requirements  narrated  above  are  at  hand, 
without  a  coordinated  and  cooperative  system  by  which  our 
American  business  men  may  work  together  under  favorable 
conditions  and  in  the  spirit  of  mutual  advantage,  we  shall 
strive  in  vain  to  win  our  rightful  share  of  foreign  commerce. 
The  war  has  proved  conclusively  that  great  results  can  be 
accomplished  by  team  play  and  by  learning  how  to  work 
together  to  a  common  end.  Kipling's  verse  should  be 
graven  upon  the  doorposts  of  our  foreign  trade  policies: 

It  ain't  the  individuals. 

Nor  the  anny  as  a  whole, 
But  the  everlasting  teamwork, 

Of  every  bloomin'  soul. 

We  must  knock  out  competition  at  home  where  that  com- 
petition hamstrings  our  national  business:  we  must  get 
over  fear  of  governmental  aid  and  see  to  it  that  laws  are 
enacted  commensurate  with  those  under  which  European 
nations  are  now  conducting  their  overseas  commerce.  Our 
antitrust  legislation  needs  to  be  reformed  to  meet  existing 
conditions.  Such  enactments  as  the  Webb  Bill  and  the 
Edge  Bill  and  the  recent  Jones  Bill  are  along  the  lines  of 
necessity  and  give  hope  for  our  foreign  business.  There  is 
need  to-day  for  the  raising  up  of  maritime  leadership  able 
to  coordinate  our  shipping  interests  through  adequate 
legislation  and  the  establishment  of  private  ownership 
and   management.     The   stability   of   our   transportation 


FOREIGN  TRADE  REQUIREMENTS  11 

at  home  in  the  realm  of  our  railroads  is  almost  as  vital 
to  our  foreign  trade  as  it  is  to  our  domestic  commerce,  as 
foreign  trade  begins  usually  on  the  home  railroads.  The 
shore,  where  the  products  are  transferred  from  cars  to 
ships,  should  be  considered  as  a  transfer  point  only.  Co- 
operative, economic  agreements  are  the  keys  to  world  prob- 
lems and  we  must  look  for  these  new  agreements  among 
producers  at  home  if  our  trade  is  to  mass  all  its  strength 
and  eliminate  disputes  and  friction.  It  goes  without  saying 
that  this  spirit  of  cooperating  business  activities  cannot 
exist  with  constant  antagonism  between  capital  and  labor, 
nor  while  political  unrest  under  the  guise  of  Bolshevism, 
destructive  strikes,  or  any  phase  of  class  war,  thrusts  at  the 
vitals  of  success  of  American  foreign  enterprises. 

It  has  been  said  repeatedly  that  the  new  era  opening 
beyond  the  "World  War  period  is  to  be  a  ''business  man's 
era,"  that  the  commercial  and  industrial  leader  is  to  be 
the  new  diplomat  of  the  coming  decade,  but  this  leadership 
which  involves  cooperation  between  science  and  industry, 
between  the  man  who  works  with  his  hands  and  the  man 
who  works  with  his  brain,  this  joining  into  one  the  potent 
forces  of  business  organization,  are  problems  that  will  not 
settle  themselves.  They  require  the  highest  intelligence  and 
thoughtfulness  on  the  part  of  our  most  able  men  of  affairs, 
and  more  study  than  they  have  yet  received.  If  we  are  to 
have  a  league  to  enforce  peace,  binding  together  the  hearts 
and  hands  of  men  around  the  world,  this  league  spirit  must 
have  its  primary  and  efficient  exhibition  in  the  friendly 
unity  of  those  who  are  responsible  for  the  material  and 
industrial  foundations  of  a  world  now  in  its  remaking. 


CHAPTER  II 

KNOWING  THE  EXPORT  BUSINESS 

Knowledge  is  more  than  equivalent  to  force. — Sam'l  Johnson. 

According  to  a  well-known  export  manufacturer,  * '  export 
trade  is  national  insurance. ' '  It  has  been  the  burden  of  the 
writing  by  foreign  trade  experts  as  well  as  the  speech- 
making  at  conventions  of  manufacturers  for  at  least  a 
decade  in  the  United  States,  that  the  American  factories  in 
order  to  keep  going  the  year  around  must  have  an  outlet 
outside  the  country  for  at  least  25  per  cent  of  their  manu- 
factured goods.  Until  comparatively  recently  this  truth 
has  not  taken  possession  widely  of  the  consciousness  of 
American  industrial  leaders.  In  many  cases  manufacturers 
have  taken  a  dip  into  foreign  trade  at  times  when  business 
was  slack  in  this  country  or  when  some  particularly  oppor- 
tune opening  appeared.  As  American  trade  increased,  or 
through  a  lack  of  knowledge,  incompetency  of  agents  or 
mistakes  in  method,  these  same  American  manufacturers 
were  inclined  to  drop  their  foreign  activities  and  to  devote 
themselves  again  exclusively  to  the  home  market. 

There  have  been  also,  and  still  exist  in  the  country,  short- 
sighted manufacturers  who  seem  to  follow  the  political 
slogan  of  nonentanglement  in  trade  alliances  abroad.  We 
have  heard  many  a  manufacturer  say  that  our  country  is 
big  enough  to  furnish  all  the  opportunity  needed  for  trade 
and  they  would  seem  to  wish  to  erect  a  kind  of  Chinese 
wall  around  the  United  States  as  far  as  trading  is  con- 
cerned. 

12 


KNOWING  THE  EXPORT  BUSINESS  13 

These  conceptions  are  now  being  branded  both  as  un- 
businesslike and  also  as  inimical  to  the  proper  trade 
expansion  of  America.  American  business  organizations 
have  been  reorganizing  their  entire  activities,  both  domestic 
and  foreign,  and  in  this  reorganization  the  export  end  of 
the  work  is  receiving  both  financial  support  and  better 
trained  leadership.  It  is  being  realised  that  any  form  of 
exclusiveness  in  trade  means  paralysis,  and  that  the  mixture 
of  international  currents  of  thought  with  merchandising 
is  in  line  with  progress  and  success.  Practical  proof  of  this 
fact  is  demonstrated  by  examining  the  total  trade  statistics 
of  the  United  States  with  various  foreign  countries.  For 
the  fiscal  year  ending  June  30,  1913,  the  total  foreign  com- 
merce of  the  United  States  was  $4,278,892,000.  During  the 
fiscal  year  ending  June  30,  1918,  this  total  trade  had 
mounted  to  $8,865,366,000,  or  a  percentage  of  increase 
amounting  to  107.  "While  the  greatest  foreign  commerce  of 
the  United  States  for  the  year  1918  was  with  the  United 
Kingdom,  amounting  to  $2,185,945,000,  our  trade  with 
Latin  America  in  this  year,  1918,  was  $1,804,583,000.  Next 
in  volume  of  commerce  was  our  trade  with  Canada,  which 
in  the  year  1918  amounted  to  $1,212,745,000.  The  eight 
other  countries  with  which  the  foreign  commerce  of  the 
United  States  in  1918  amounted  to  more  than  $100,000,000 
were  as  follows : 

France $  959,37.3,000 

Japan 552,586,000 

Italy 507,913,000 

British  East  Indies 348,899,000 

China 160,122,000 

Russia  in  Europe 131,852,000 

Phihppine  Islands 126,526,000 

Australia 116,053,000 

For  the  calendar  year  1919,  the  total  foreign  commerce  of 
the  United  States  was  $11,824,790,922.  Countries,  in  that 
year,  having  more  than  $100,000,000  commerce  with  the 
United  States  were  as  follows : 


14        FOREIGN  TRADE  MARKETS  AND  METHODS 

United  Kingdom $2,587,746,789 

Canada    1,228,940,867 

France 1,017,179,221 

Japan   776,217,616 

Cuba  697,001,485 

Italy 501,736,907 

British  East  Indies 403,664,631 

Belgium 385,582,408 

Argentina 355,057,791 

Brazil   , 348,266,929 

Netherlands 330,605,243 

Mexico 280,381,477 

China 260,224,557 

Denmark 170,159,228 

Australia 153,242,777 

Spain 152,314,653 

Sweden  146,792,062 

Norway    142,505,843 

Philippines 136,841,289 

Chile  135,563,451 

Dutch  East  Indies 125,320,080 

Switzerland    103,833,372 

Germany 103,369,455 

The  following  table  shows  the  condition  of  our  commerce 
both  export  and  import  since  the  year  1880 : 


In 

.   Exports 

Imports 

Total 

1880 

$  836,000,000 

$  668,000,000 

$1,504,000,000 

1890 

858,000,000 

789,000,000 

1,647,000,000 

1900 

1,395,000,000 

850,000,000 

2,245,000,000 

1910 

1,745,000,000 

1,557,000,000 

3,302,000,000 

1913 

2,466,000,000 

1,813,000,000 

4,279,000,000 

1918 

5,928,000,000 

2,946,000,000 

8,874,000,000 

1919 

7,920,000,000 

3,904,000,000 

11,824,000,000 

1920 

8,228,000,000 

5,279,000,000 

13,507,000,000 

In  the  phrase  of  the  exporter  previously  quoted,  a  policy 
to  do  business  wherever  business  can  be  done  in  any  part  of 


KNOWING  THE  EXPORT  BUSINESS  15 

the  world  furnishes  a  trade  insurance  against  panics,  labor 
troubles  and  depressions  at  home  and  directs  into  our 
home  business  a  fresh  stream  of  interest  and  enterprise. 
As  a  writer  in  World's  Markets  said: 

Panics  are  not  world-wide — they  don't  occur  in  all  places 
simultaneously,  and  the  man  who  has  a  market  in  South  Africa 
and  in  Russia  and  in  China  and  in  Siberia,  as  well  as  in  Europe 
and  South  America  and  Australia,  is  pretty  sure  that  if  he  can- 
not sell  his  product  in  one  place,  he  can  sell  it  in  another;  he  has 
taken  out  the  best  kind  of  insurance  against  hard  times  for  his 
business,  and  incidentally  for  his  employees,  his  bankers,  his 
suppliers  of  raw  material  and  the  local  tradesmen  in  his  com- 
munity. 

Furthermore,  it  is  being  realized  that  the  American 
trader  is  not  outclassed  by  any  other  national  when  he 
devotes  himself  seriously  to  the  task  of  securing  markets 
for  his  goods  in  foreign  lands.  Go  wherever  you  will  to-day 
into  almost  any  part  of  the  earth  and  you  will  find  the 
American  trader,  when  properly  trained,  holding  his  own 
in  competition  with  the  Englishman,  the  German,  the 
Frenchman,  the  Spaniard  or  the  Japanese.  The  new  influ- 
ences and  prevalence  of  American  trade  and  shipping  were 
brought  home  to  us  recently  by  the  statement  of  a  man  who 
has  just  returned  from  a  long  round-the-world  voyage  on  a 
freight  ship.  He  stated  that  in  every  port,  virtually  with- 
out exception,  which  he  had  visited  (including  the  main 
ports  of  Japan,  China,  Philippines,  East  India,  Alexandria, 
and  the  chief  ports  of  the  Mediterranean  Sea)  he  counted 
from  6  to  as  many  as  20  vessels  flying  the  American  flag. 
We  recall  vividly  the  fact  that  on  two  journeys  around  the 
world  before  the  war  we  saw  only  two  ships  in  Oriental 
ports  flying  the  Stars  and  Stripes,  and  these  were  very 
insignificant  oil  steamers  of  the  tramp  variety. 

Success,  however,  in  this  vital  field  is  achieved  only  when 
the  American  trader  appreciates  seriously  the  vital  necessity 
of  securing  firmly  his  business  in  foreign  trade  markets, 
and  sets  his  mind  earnestly  towards  permanent  accomplish- 


16         FOREIGN  TRADE  MARKETS  AND  METHODS 

ment.  Witness  for  proof  the  success  abroad  of  the  Singer 
Sewing  Machine  Company,  the  Standard  Oil  Company, 
our  typewriter,  kodak  and  automobile  companies,  the  Inger- 
soll  Watch  Company,  and  notably  our  American  steel  and 
agricultural  machinery  firms. 

It  is  encouraging  in  this  connection  to  note  that  while 
we  have  yet  to  learn  much  relative  to  methods  and  the 
adjustment  of  the  point  of  view  for  trade,  with  Latin 
America  for  instance,  the  late  statistics  concerning  this 
trade  reveal  the  fact  that  the  American  exporters  and  man- 
ufacturers in  1919  had  the  largest  total  trade  with  South 
America  of  any  nation.  Before  the  war,  the  United  States 
was  second  to  Great  Britain  as  an  export  nation,  while  in 
the  year  1919  our  commerce,  according  to  the  reports  of  the 
Bureau  of  Foreign  and  Domestic  Commerce,  more  than 
doubled  that  of  the  United  Kingdom.  Our  trade  with 
South  America  has  doubled  since  1914,  while  our  exports 
to  the  Orient  and  Australia  underwent  even  a  greater  gain. 

We  are  now  at  the  point  when  we  must  understand  the 
**how"  of  foreign  trade.  We  have  many  men  capable  of 
carrying  on  commercial  relationships  with  foreign  coun- 
tries. They  are  being  trained  both  in  the  practical  and 
theoretical  schools  of  overseas  commerce.  We  have  the 
manufactured  goods  and  products  of  our  national,  in- 
ventive genius  and  fabricating  skill,  particularly  those 
manufactured  goods  in  the  realm  of  heavy  machinery,  steel 
products,  office  specialties,  automobiles,  hardware,  shoes, 
hosiery,  sewing  machines,  cash  registers,  typewriters  and 
a  hundred  other  specialties  germane  to  American  inventive 
and  skillful  production.  Now  we  must  devote  unqualified 
and  studied  attention  to  the  methods  of  the  game.  The 
secret  of  success  in  foreign  trade  is  largely  dependent  upon 
the  judgment  of  the  manufacturer  in  choosing  the  proper 
method  to  market  his  particular  commodity.  There  have 
been  probably  more  failures  and  losses  in  this  line  than  in 
any  other. 

In  the  first  place,  one  must  take  for  granted  that  the 
existence   and  knowledge  of  shipping   arrangements  are 


KNOWING  THE  EXPORT  BUSINESS  17 

present.  This  is  more  important  than  ever  before,  for  it  is 
estimated  that  American  ships  are  now  carrying  approxi- 
mately 50  per  cent  of  American  goods  to  foreign  shores. 
Our  own  banking  arrangements  are  also  coming  along;  a 
nation  cannot  make  a  success  of  foreign  trade  without  the 
permanent  service  of  banks  owned  and  controlled  by  that 
nation.  Other  agencies,  such  as  marine  insurance  and 
knowledge  of  proper  documentation,  packing  for  export, 
cable  service  and  acquaintance  with  the  tastes  and  desires 
of  foreign  people  are  vital  adjuncts  to  foreign  commerce,  all 
of  which  are  gradually  being  learned. 

The  Export  Merchant. — The  export  merchant  chooses 
a  fascinating  though  complicated  career :  he  may  decide, 
in  the  first  place,  to  purchase  outright  for  his  own  ac- 
count; to  purchase  on  commission  for  his  principals 
abroad;  or  to  serve  the  special  lines  and  the  factory 
arrangements  without  extra  charge  to  a  customer  abroad. 

Mr.  John  F.  Fowler,  one  of  our  oldest  and  best  known 
export  merchants,  has  summed  up  certain  of  the  qualifica- 
tions and  the  necessary  knowledge  of  the  export  merchant 
as  follows: 

He  is  an  instigator  of  business,  by  eonsta-nt  vigilance,  whether 
in  commodities  or  manufactures;  and  a  great  pioneer  in  foreign 
markets.  He  must  be  in  familiar  and  constant  contact  with  fac- 
tory representatives  at  the  home  end,  so  that  he  shall  not  be  tardy 
in  reporting  prospects  to  his  foreign  customer  on  those  articles 
singled  out  as  likely  to  interest  him.  This  involves  not  only  a  close 
watch  of  this  end  but  also  the  ever  changing  conditions  abroad. 
He  has  also  to  be  keen  in  the  matter  of  ocean  transportation,  with 
ever  an  eye  on  the  constantly  fluctuating  freight  rates  and  ready 
for  every  shipping  opportunity,  if  he  is  propei'ly  to  serve  and 
retain  his  foreign  customer.  Frequently  foreign  business  calls  for 
special  services,  here  and  abroad,  both  laborious  and  expert  in 
performance.  He  must  also  be  familiar,  for  quick  action,  with  all 
the  consular  and  Governmental  formalities  which  vary  with  every 
country,  especially  those  of  Latin  America.  He  must  be  organ- 
ized for  rapid  preparation  of  documents,  embracing  multifarious 
details,  in  such  perfect  order  and  so  explicit  that  the  foreign  cus- 
tomer can  dispose  of  any  given  package,  on  its  documentary 


18        FOREIGN  TRADE  MARKETS  AND  METHODS 

description,  without  having  to  open  and  check  over  its  contents 
before  it  can  be  sold  or  shipped  away  to  some  interior  point. 
And  these  documents  must  go  forward  not  later  than  the  carrier 
of  the  goods.  This  demands  trained  office  help,  necessarily  com- 
petent, to  prepare  documents  in  foreign  languages,  and  far  beyond 
the  I'outine  of  home  business.  Unless  all  is  done  correctly,  the 
export  merchant  has  constantly  to  respond  for  claims  for  ex- 
penses arising  from  flaws  in  his  documents;  and,  with  many 
countries,  this  is  a  very  serious  responsibility  indeed. 

Wholly  apart  from  the  fore-going,  the  export  merchant  has  to 
finance  his  shipments,  not  only  cash  payments  here  for  what  he 
has  purchased,  but  also  heavy  cash  disbursements  for  ocean 
expenses;  and,  furthermore,  extend  credit  to  his  foreign  customer. 
Thus  he  is  not  only  merchant,  but  banker  as  well ;  and  has  usually 
to  carry  credit  risks  as  long  as  six  months,  with  all  of  the  financial 
risks  thereby  involved. 

The  difficulties  and  the  vexations  of  the  export  mer- 
chant are  numerous.  Acting  as  a  go-between  v^ith  the 
home  manufacturer  on  one  end  and  the  foreign  customer 
upon  the  other,  his  duties  carry  him  into  almost  every 
kind  of  exigency  relative  to  trading,  banking,  transporta- 
tion and  contact  with  government  and  business  officials. 
Local  disasters  and  financial  crises,  famines,  floods  and 
fires,  as  well  as  political  and  revolutionary  changes  are 
ordinary  obstacles  in  his  path.  His  goods  may  be  subject 
to  loss  by  earthquakes  and  other  unforeseen  developments. 
Such  periods  as  the  later  part  of  1920  and  the  early  part 
of  1921,  when  foreign  exchange  and  the  reaction  from  war 
presented  innumerable  obstacles,  furnish  an  example  of 
some  of  the  contingencies  connected  with  the  export  mer- 
chant's activities.    As  one  man  has  stated  it, 

The  export  merchant  is  constantly  between  the  devil  and  the 
deep  sea. 

While  it  is  thought  in  some  quarters  that  the  business 
of  exporting  is  an  easy  road  to  wealth,  those  who  best 
know  the  game  realize  that  it  is  only  through  very  careful 
adherence  to  the  best  tried  laws  aad  regulations  for  for- 


KNOWING  THE  EXPORT  BUSINESS  19 

eign  trade  added  to  years  of  experience  that  the  export 
merchant  can  obtain  any  considerable  returns  for  his 
labor.  It  has  been  stated  by  men  in  this  field  competent 
to  speak  on  the  subject  that  the  export  merchant  has 
been  able  scarcely  to  average  2^/^  per  cent  on  shipments 
of  manufactured  goods,  a  much  smaller  margin  than 
would  satisfy  our  domestic  merchants  who  are  not  called 
upon  to  face  foreign  contingencies,  such  as  inevitably  bad 
debts  and  a  series  of  conditions  which  distance  and  vary- 
ing nationalities  impose  upon  the  foreign  merchant.  The 
exporter  must  depend  upon  big  turnover  in  commodities ; 
he  must  rely  upon  his  judicious  action  in  times  of  fluctu- 
ating markets  and  his  broad  judgment  of  world  conditions 
to  enable  himself  to  show  a  profit  on  the  year's  trading. 

It  is  only  when  the  manufacturer  and  the  export  mer- 
chant understand  each  other's  problems  and  begin  to  co- 
operate, as  has  been  the  case  in  certain  European  nations, 
that  many  of  the  difficulties  of  the  pioneer  exporter  are 
obviated.  The  American  export  merchant  has  not  been  and 
is  not  now  inclined  to  look  to  the  Government  for  support, 
as  has  been  true  in  the  past  with  certain  European  export 
houses.  Indeed,  he  desires  usually  to  be  freed  from  the 
often  mistaken  and  hampering  regulations  of  politicians 
both  in  navigation  and  merchandising  methods.  The  ranks 
of  foreign  traders  are  filled  usually  by  wide-awake  and 
capable  men  who,  like  the  Chinese,  are  not  interested  so 
much  in  the  particular  form  of  government  as  in  tlie  con- 
trolling wish  that  the  government,  whatever  it  may  be, 
keeps  its  hands  off  the  traders'  specialistic  task.  The 
exporter  is  worthy  of  being  placed  in  the  professional 
class  of  citizens  and  he  should  be  given  a  free  field  for  his 
action,  being  relieved  from  the  anxiety  which  is  conse- 
quent upon  the  decisions  of  government  officials  at  Wash- 
ington, who  too  often  know  little  or  nothing  about  the 
vexatious  problems  attendant  upon  doing  business  with 
people  in  alien  lands. 

In  spite  of  the  obstacles  which  confront  the  inter- 
national merchant,  however,  there  is  a  growing  confidence 


20         FOREIGN  TRADE  MARKETS  AND  METHODS 

in  the  fact  that  the  American  exporter,  as  a  steamship 
man  and  banker,  and  as  one  chiefly  interested  in  the 
reciprocal  export  and  import  trade  of  the  country,  is 
developing  the  capacities  for  permanent  success  in  this 
field.  His  future  depends  very  largely  upon  the  quality 
and  the  training  of  the  men  who  will  be  attracted  to  this 
service.  With  the  coming  of  settled  conditions  there  is 
quite  certain  to  be  revealed  fresh  evidences  of  the  new 
interest  in  overseas  commerce  on  the  part  of  Americans 
and  with  our  new  ships  and  our  new  enthusiasm  there  is 
little  doubt  that  the  means  will  be  found  to  compete 
successfully  with  export  traders  of  any  and  every  land. 

For  those  who  are  about  to  embark  on  this  career,  we 
would  point  out  the  difficulties  as  well  as  the  expanding 
possibilities  for  useful  and  profitable  service.  The  export 
merchant  does  not  choose  an  easy  job ;  yet  it  is  one  which 
repays  many  fold,  not  only  in  monetary  return  to  the  suc- 
cessful trader,  but  also  in  the  satisfaction  that  he  is  help- 
ing to  extend  the  borders  of  civilized  commerce,  than 
which  few  accomplishments  are  more  honorable  and 
worthy  of  respect. 

The  Commission  House. — Among  the  outstanding  meth- 
ods which  are  indispensable,  and  which  the  exporter  and 
trader  must  master,  is  a  knowledge  of  the  somewhat 
intricate  workings  of  commission  houses. 

This  agency  has  linked  so  successfully  American  manu- 
facturers with  foreign  markets  as  to  become  a  permanent 
organization  through  Avhich  foreign  markets  can  com- 
municate and  do  business  with  our  country  at  those  times 
when  the  American  manufacturer  from  various  causes 
loses  his  interest  in  foreign  trade.  The  commission  house 
has  built  up  its  connections  and  become  so  efficient  in  its 
knowledge  of  all  the  complex  arrangements  relating  to 
overseas  trade  that  it  is  in  a  position  to  be  of  indispensable 
assistance  to  the  manufacturer  who  wishes  to  begin  the 
exploitation  of  his  goods  in  foreign  lands. 

The  original  purpose  of  the  export  commission  house 
was  to  act  as  a  resident  representative  of  foreign  export- 


KNOWING  THE  EXPORT  BUSINESS  21 

ing  and  importing  firms  accomplishing  on  a  commission 
basis  the  buying  and  selling  of  goods  through  its  knowl- 
edge of  markets  at  home  and  abroad.  In  addition  to 
acting  as  a  selling  agent  the  commission  house  is  obligated 
to  secure  the  best  possible  prices  for  import  consignments 
and,  on  the  other  hand,  as  purchasing  agent  to  secure  the 
lowest  possible  prices  on  goods  ordered  for  export.  With 
these  duties  in  mind  the  commission  house  has  built  up 
its  branches  to  handle  effectively  and  expeditiously  the 
work  of  its  clientele,  and  in  this  capacity  alone  there  is 
little  doubt  but  that  this  form  of  doing  business  overseas 
will  continue  with  various  modifications  in  the  years  to 
come. 

In  addition  to  this  function  of  acting  as  a  go-between, 
the  export  commission  house  has  gradually  added  other 
activities,  securing  often  its  own  shipping  lines  and  in 
certain  cases  establishing  its  own  bank,  and,  what  is  even 
more  distinctive,  developing  its  work  into  a  trading  com- 
pany, establishing  its  branch  offices,  warehouses,  and 
storerooms  with  stocks  of  goods  in  various  parts  of  the 
world.  In  other  words,  the  commission  house  has  evolved 
in  many  cases  into  an  international  merchandising  or 
trading  house.  The  exporter  operating  on  commission  has 
evolved  into  an  export  merchant,  buying  and  selling  for 
himself  goods  and  products  wherever  it  seems  feasible, 
and  through  his  genius  for  organization,  proving  himself 
capable  of  combining  the  qualification  of  merchant  and 
banker  with  that  of  steamship  man  and  export  trader, 
equipped  with  a  knowledge  of  language,  correspondence, 
advertising  and  selling  activity,  together  with  managerial 
ability  on  foreign  soil. 

As  an  example  the  house  of  W.  R.  Grace  &  Co., 
which  is  thouglit  of  by  many  to  be  simply  a  commission 
house,  has  developed  into  a  great  international  merchan- 
dising organization.  The  house  is  like  a  great  tree  whose 
roots  or  feeders  have  become  large  industrial  plants 
established  by  the  company,  such  as  their  nitrate  plants 
and  woolen  mills  in  Chile,  their  cotton  mills,  sugar  fac- 


22         FOREIGN  TRADE  MARIOITS  AND  METHODS 

tories  and  mines  in  Peru  and  Bolivia.  The  trunk  of  the 
tree  is  naturally  the  merchandising  of  its  own  products 
as  well  as  a  vast  number  of  other  materials  handled,  such 
as  machinery,  tea,  coffee,  cocoa,  hides  and  skins,  chemicals, 
cereals,  fertilizers  and  scores  of  other  articles.  Among 
the  branches  of  this  tree  are  one  hundred  and  fifty  different 
offices  and  agencies  owned  or  operated  by  the  company  in 
twenty  different  nations ;  W.  R.  Grace  &  Co.  's  Bank,  through 
which  international  banking  operations  are  carried  on ;  ship- 
ping lines  running  not  only  to  different  ports  of  South  and 
Central  America  from  both  the  Atlantic  and  Pacific  Coasts, 
but  also  lines  running  to  the  Far  East  and  literally 
around  the  world ;  a  marine  insurance  department ;  a  cable 
department ;  together  with  particular  agencies  for  welfare 
and  educational  work,  and  the  publication  of  their  own 
periodicals  at  the  home  and  certain  branch  offices. 

One  of  the  directors  of  this  firm  has  stated  the  object 
and  intent  of  the  company : 

We  are  building  always;  we  consider  ourselves  to  be  merehants 
primarily,  but  the  activities  of  the  company  are  many  and  diverse. 
We  are  industrial  developers,  steamship  men,  bankers,  nitrate 
merchants,  as  well  as  promoters  of  all  kinds  of  public  service  and 
industries — everything,  in  fact,  that  tends  especially  to  the  devel- 
opment of  the  countries  where  our  activities  have  gone. 

Direct  Exporting. — If  the  manufacturer  desires  to  eon- 
duct  his  own  foreign  trade  without  using  the  intermediary 
of  a  commission  house,  or  in  other  words,  follows  the 
direct  exporting  plan,  he  must  begin  with  a  well-thought- 
out  policy,  organize  an  export  department  and  be  ready 
intelligently  to  push  the  sale  of  his  goods  in  a  foreign 
country.  Among  the  agencies  which  he  will  need  to  eon- 
aider  are  a  competent  executive  at  the  head  of  the  export 
department,  a  branch  office  or  responsible  agent  in  the 
foreign  country,  the  use  of  traveling  salesmen  and  the 
consideration  of  such  matters  as  mail-order  plans  and 
advertising  methods. 

The  disadvantage  of  this  method  of  direct  exporting 


KNOWING  THE  EXPORT  BUSINESS  23 

lies  ostensibly  for  the  new  foreign  trader  in  his  lack  of 
knowledge  and  experience  of  the  intricate  methods  of 
foreign  commerce,  while  among  its  advantages  must  be 
considered  the  fact  that  the  manufacturer  himself  has  that 
important  asset  of  being  brought  directly  in  touch  with 
his  constituency  in  foreign  countries,  and  all  efforts  of 
advertising  and  salesmanship  go  directly  to  building  up  a 
permanent,  direct,  interrelated  trade  between  himself  and 
his  foreign  clients. 

In  either  of  these  methods  a  large  secret  of  success  lies 
in  the  manufacturer's  ability  to  keep  closely  and  person- 
ally in  contact  with  his  representatives.  No  manufacturer 
can  expect  to  get  far  in  foreign  trade  who  ''farms  out" 
his  responsibility  to  any  manager  or  organization  what- 
soever, thinking  because  he  has  chosen  an  acceptable 
method  of  foreign  trade  this  method  will  take  care  of  itself 
without  his  constant  thought  and  attention.  It  goes  with- 
out saying  that  in  choosing  salesmen  or  agents  for  his 
product  he  should  endeavor  to  get  men  who  will  devote 
their  energies  as  exclusively  as  possible  to  his  particular 
article  or  articles.  "When  agents  or  representatives  are 
selling  fifteen  or  twenty  different  kinds  of  merchandise  for 
various  manufacturers,  it  stands  to  reason  that  each  manu- 
facturer is  sure  to  receive  only  a  minimum  of  his  possible 
activity  or  concentration.  It  must  further  be  realized  that 
the  manufacturer  who  chooses  the  direct  method  of  con- 
ducting his  foreign  activities  will  require  a  considerable 
amount  of  capital  for  the  development  of  a  particular  line 
of  business  and  with  that  capital  he  must  unite  both  time, 
energy  and  thoughtfulness  in  working  out  with  his  export 
manager  the  details  of  his  plan.  We  would  recommend 
that  the  manufacturer  who  plans  to  engage  in  new  foreign 
business  directly  or  indirectly  should  keep  in  close  touch 
with  the  Bureau  of  Foreign  and  Domestic  Commerce  in 
Washington,  D.  C,  from  which  department  he  will  be  able 
to  gain  useful  printed  information  in  answer  to  his  ques- 
tions. Among  the  topics  of  which  the  American  manufac- 
turer should  have  a  working  knowledge  are  a  study  of  the 


24         FOREIGN  TRADE  MARKETS  AND  METHODS 

world  markets  in  order  to  find  out  where  his  particular 
products  have  the  best  possible  chance  for  sale ;  an  examina- 
tion of  the  export  policies  and  export  houses  adopted  by 
successful  foreign  traders;  the  knowledge  of  the  qualifica- 
tions and  requirements  for  a  good  export  salesman; 
together  with  attaining  a  grasp  upon  the  methods  of  finan- 
cing, shipping  and  the  somewhat  intricate  export  technique 
associated  with  international  laws  and  tariffs,  as  these 
affect  the  carriage  and  the  introduction  of  various  products 
into  countries  other  than  his  own. 

'The  Export  Managfer. — The  office  of  export  manager 
has  come  to  be  an  important  one  and  in  addition  to  the 
men  Avho  occupy  this  position  several  women  hold  posi- 
tions as  export  managers  for  trading  houses  in  the  United 
States.  "While  formerly  this  officer  had  little  or  no  train- 
ing and  frequently  limited  knowledge  concerning  over- 
seas markets  and  countries,  depending  largely  upon  his 
genius  of  salesmanship  applied  to  new  fields,  it  is  becom- 
ing more  and  more  important  for  a  manager  to  broaden 
his  knowledge  widely  in  such  subjects  as  exporting  prac- 
tice among  the  leaders  in  foreign  trade,  foreign  languages, 
world  markets,  methods  of  export  sales,  shipping  and 
banking  facilities.  It  is  important  that  this  man  should 
be  more  than  a  routine  manager,  for  this  office  requires 
executive  ability  and  a  broad  human  knowledge  and  quick 
adaptability  to  conditions  and  customs  other  than  our  own. 
Frequently,  this  manager  has  at  his  hand  what  is  called 
an  "export  technician"  who  helps  to  carry  out  his  strategic 
ideas  in  detail. 

In  relation  to  the  qualifications  of  such  a  manager,  Mr. 
George  C.  Vedder,  whose  book  entitled  American  Methods 
in  Foreign  Trade  published  by  the  McGraw-Hill  Company, 
will  be  found  useful  in  this  connection,  suggests  that: 

Without  possessing  in  some  degree  such  qualities  as  breadth 
of  vision,  executive  ability,  a  fair  and  open  mind,  ingenuity,  far- 
sightedness, sjrstematie  industry,  patience,  intellectual  and  moral 
honesty,  and  practical  idealism,  only  a  moderate  success  can  at 
best  be  achieved. 


KNOWING  THE  EXPORT  BUSINESS  25 

•  It  is  necessary  here  as  in  other  important  posts  of  leader- 
ship in  foreign  business  that  the  man  keep  himself  suffi- 
ciently free  from  trammeling  and  perfunctory  detail.  To 
"see  things  in  the  big,"  or,  as  one  has  expressed  it,  "see 
big  things  big  and  small  things  small."  It  is  a  position 
requiring  farsightedness  as  well  as  efficiency  and  it  requires 
the  ability  to  make  independent  and  prompt  decisions. 

Practical  Idealism. — There  is  also  a  very  necessary 
characteristic  which  Americans  possess  inherently  and 
which  the  export  manager  of  trade  needs  primarily  if  he 
is  to  succeed.  We  have  sometimes  called  this  utilitarian 
idealism,  the  combination  of  the  ability  to  see  and  to  dream 
dreams,  and  at  the  same  time  to  keep  one's  feet  on  the 
earth  and  carry  out  those  dreams.  It  means  adding  to 
business  abilities  enlightened  aims  and  an  unselfish  appre- 
ciation of  humanity.  A  sympathetic  understanding  of 
people,  whatever  may  be  their  religion,  their  race,  their 
temperament  and  environment,  is  positively  necessary. 

It  is  in  this  element  of  practical  idealism  that  the 
American  has  a  particular  chance  to  develop  far-reaching 
success  in  the  solution  of  foreign  problems  and  the  capture 
of  foreign  markets. 

In  a  land  where  the  word  "utility"  is  ubiquitous,  and 
in  an  atmosphere  where  a  dreamer  is  supposed  to  be  a 
visionary,  the  union  of  the  two  in  one  individual  would 
seem  at  first  to  be  an  irreconcilable  anachronism.  Never- 
theless, the  idealism  of  the  twentieth-century  American  is 
a  very  real  thing,  and  it  has  never  been  more  accurately 
designated  than  in  a  phrase  written  by  Prof.  John  R, 
Commons  in  an  article  contributed  to  the  Intercollegiate 
Magazine  in  1909,  "Utilitarianism  Is  the  Democracy  of 
Idealism. ' ' 

It  is  this  inexplicable  idealism  in  the  midst  of  the  prac- 
tical, the  marriage  of  the  imagination  with  modem  applied 
science,  the  secularizing  of  the  mind  and  the  spirit,  and 
the  bringing  out  of  dreams  into  the  light  of  common  day, 
that  distinguishes  present-day  America.  No  other  country 
by  location  or  tradition  has  been  so  conducive  to  the  draw- 


26         FOREIGN  TRADE  MARKETS  AND  METHODS 

ing  out  of  a  useful  idealism,  or  to  making  the  mystic  and 
the  scholar  practical  and  serviceable  to  the  community. 
The  vast  distribution  of  wealth,  the  marvels  of  scientific 
exploration  and  industry,  surpassing  the  wonders  of  the 
Egyptians,  the  strain  of  the  Puritan,  all  set  in  an  atmos- 
phere of  democratic  obligation  and  cooperation,  have 
furnished  an  alluring  and  an  enchanting  field  for  the 
development  of  a  quality  of  idealism  heretofore  uncommon 
among  men. 

Strange  as  it  may  seem,  it  is  in  the  person  of  the 
American  business  man,  practical,  level-headed,  "all  busi- 
ness," that  this  current  of  the  ideal  is  clearly,  often  most 
clearly,  seen.  His  big-heartedness  is  often  in  proportion 
to  his  blunt  directness.  Get  a  bit  below  the  surface  and 
you  will  find  frequently  a  nature  steeped  in  sentiment. 
"We  do  two  things  exceedingly  well,"  says  George  Barr 
McCutcheon,  "we  dream  and  we  perform."  At  the  call 
of  distress,  either  at  home  or  abroad,  his  purse-strings  are 
loosened  with  a  prodigality  that  marks  the  fanatic.  In  his 
business  office  he  may  be  as  austere  as  the  statue  of  Mem- 
non,  but  in  his  home  or  in  the  company  of  his  friends  he 
is  as  full  of  idealistic  feeling  and  often  of  romanticism  as 
the  East  Indian  schoolboy. 

The  average  American  man  of  affairs,  as  soon  as  he  gets 
past  the  persiflage  of  group  conversation  to  his  heart-to- 
heart  talk  with  you  in  quiet,  will  lead  you  to  the  little 
holy  of  holies  of  his  own  personal  ideals,  to  some  fine  worth- 
while issue,  without  which,  notwithstanding  his  dollars,  his 
ships,  his  industries,  and  his  automobiles,  he  would  be  poor 
indeed. 

Among  the  firms  looking  toward  foreign  trade  is  some- 
times found  the  state  of  affairs  in  which  an  export  manager 
possessed  of  these  broad  ideals  of  humanity  and  vision  is 
tied  to  a  narrow-minded  manufacturer  whose  standards 
and  methods  apply  only  to  a  local  situation.  The  only 
sensible  way  for  such  a  manufacturer  is  to  secure  an  export 
manager  with  experience  and  ability  along  the  above  lines 
and  then  trust  him  to  develop  the  business. 


KNOWING  THE  EXPORT  BUSINESS  27 

There  is  involved  in  the  exporting  manufacturer's  busi- 
ness, or  there  should  be,  a  strain  of  solemn  responsibility 
to  thousands  and  tens  of  thousands  of  people  who  need 
and  may  use  his  products.  The  man  who  wins  in  a  worth- 
while way  in  this  line  must  have  some  conception  of  him- 
self as  a  great,  practical  missionary  of  trade.  He  goes  out 
through  his  men  and  his  methods  to  take  a  place  on  the  far- 
flung  battle  line  of  commerce  to  carry  the  evidences  of 
American  human  achievement  the  world  around.  If  he  is 
a  man  of  the  right  caliber  and  possessed  of  proper  ideals, 
he  will  go  to  foreign  nations  leaving  his  preconceived  nar- 
row prejudices  at  home,  being  willing  to  be  all  things  to 
all  men,  in  order  that  he  may  succeed,  not  only  in  making 
money,  but  at  the  same  time  in  carrying  the  spirit  of  the 
United  States,  the  spirit  of  democracy,  the  ''square  deal," 
and  legitimate  achievement  to  the  ends  of  the  earth.  A 
large  percentage  of  the  successes  in  foreign  trading  resides 
in  a  happy  condition  in  which  the  manufacturer  and  his 
export  manager  see  eye  to  eye  in  a  broad-spirited,  human 
policy,  a  policy  based  not  entirely  upon  selfish  considera- 
tions or  money,  but  depending  for  its  success  as  well  upon 
broad  lines  of  reciprocal  cooperation  and  a  universal  belief 
in  the  general  good  intentions  of  the  human  race  where- 
ever  it  is  encountered. 


CHAPTER  III 

FOREIGN  SALESMANSHIP  AS  A  CAREER 

I  respect  the  man  who  knows  distinctly  what  he  wishes.  The 
greater  part  of  all  the  mischief  in  the  world  arises  from  the 
fact  that  men  do  not  sufficiently  understand  their  ov/n  aims. 
They  have  undertaken  to  build  a  tower  and  spend  no  more 
labor  on  the  foundation  than  would  be  necessary  to  erect 
a  hut. — Goethe. 

New  occasions  teach  new  duties ;  they  open  doors  for  new 
careers.  It  has  been  true  always  that  the  man  who  can 
sell  something  is  a  success  in  life.  Every  one  is  engaged 
directly  or  indirectly  in  salesmanship.  It  is  one  of  the 
elementary  callings.  The  next  decade  will  give  this  busi- 
ness of  selling  a  new  standing  and  a  new  scope,  as  American 
salesmen  go  forth  to  other  lands  to  sell  their  goods,  their 
brains,  their  country's  good  will,  and  their  own  trained 
services. 

To  be  a  successful  salesman  of  American  commodities  in 
foreign  lands  is  something  over  and  in  addition  to  being 
a  successful  seller  of  goods  at  home.  It  is  something  more 
than  being  a  ** hustler,"  or  a  "drummer,"  or  a  "commer- 
cial traveler, "  or  a  "  live  wire. "  It  is  something  more  than 
having  the  ability  of  "working  off"  goods. 

Foreign  salesmanship  requires  for  its  successful  opera- 
tion something  even  beyond  a  "self-made"  man,  fine  and 
praiseworthy  as  such  a  man  is  rightfully  estimated  to  be. 
Mr.  Lincoln's  observation  may  be  remembered  concerning 
a  self-made  man,  who,  he  averred,  was  "too  often  in  love 
with  his  maker."  We  believe  it  was  Oliver  Wendell 
Holmes  who  said  that  he  liked  a  self-made  man,  but  for 

28 


FOREIGN  SALESMANSHIP  AS  A  CAREER  29 

steady  association  preferred  a  man  in  whom  civilized  arts 
and  world  culture  had  a  hand  in  the  making.  In  this  re- 
spect, Mr.  Holmes  was  in  line  with  the  demand  of  the  Latin, 
the  Oriental,  and  in  many  cases  with  the  colonizing  and 
commercial  Britisher  and  European.  In  other  words,  for- 
eign salesmanship  means  virtually  all  of  the  abilities  and 
accomplishments  of  the  home  salesman — ^plus.  This  "plus" 
is  the  vital  consideration  which  we  wish  to  emphasize  par- 
ticularly for  the  consideration  of  all  those  who  expect  to 
be  the  representatives  of  their  nation  in  this  new  period 
of  American  overseas  trade. 

Mr.  W.  C.  Shaw,  the  head  of  a  large  jewelry  firm  in 
Washington,  D.  C,  is  quoted  as  saying: 

The  thing  which  most  salesmen  do  not  realize  is  that  the 
amount  of  goods  a  man  sells  depends  to  a  very  gxeat  extent  upon 
his  interest  in  them,  his  knowledge  about  them,  and  his  imaginon 
tion  concerning  his  goods  and  the  customer. 

When  you  gather  these  three  traits  together  in  one  man 
in  a  rightful,  proportionate  way,  there  is  quite  likely  to 
result  the  personality  of  a  successful  salesman  either  at 
home  or  abroad.  Yet,  the  application  of  these  qualifica- 
tions when  applied  to  commerce  amongst  foreigners,  re- 
quires earnest  thoughtfulness,  and  brings  out  the  individual 
capacity  for  adjustment  and  that  peculiar  inner  sense  of 
understanding,  which  belong  alike  to  a  diplomat  and  to  a 
commercial  agent  working  in  other  lands. 

The  first  essential  of  a  foreign  salesman  is  a  broad  and 
clear  knowledge  of  the  field  and  the  facts  in  the  realm  of 
his  prescribed  activity. 

Any  problem  can  be  solved  [declared  Herbert  Hoover],  if 
you  have  the  accurate  data.  Make  sure  you  have  the  facts;  then 
you  can  command  any  situation  if  you  work  at  it  hard  enough 
and  long  enough. 

Success  in  the  foreign  field  comes  to  the  man  who  knows; 
to  the  man  who  grows  mentally  as  well  as  in  practical 


30         FOREIGN  TRADE  MARIvETS  AND  METHODS 

experience;  to  the  man  who  sets  no  limits  to  his  ideal  of 
achievement  in  the  realms  of  all-around  education  and  the 
broadening  of  his  knowledge.  This  knowledge  on  the  part 
of  a  foreign  salesman  includes  naturally  a  familiarity  with 
such  fundamental  essentials  as  prices  of  his  goods,  methods 
of  shipment,  packing  and  financing,  the  rules  and  policy 
of  his  house,  and  the  comparative  value  of  his  products  as 
related  to  possible  competitors.  We  take  for  granted  that 
no  manufacturer  or  firm  would  think  of  sending  out  of 
the  country  a  man  who  had  not  grasped  the  rudimentary 
essentials  for  selling  his  goods  at  home.  Foreign  sales- 
manship, however,  demands  a  super-salesman,  one  whose 
intelligence  and  training  enable  him  to  get  beyond  his 
specialty  to  the  country  where  he  is  selling  and  to  the 
people  with  whom  he  trades.  He  must  not  only  know  the 
people  and  the  lands  which  he  visits,  but  he  must  be  pos- 
sessed of  that  sympathetic  interest  and  imagination  en- 
abling him  to  see  needs  and  possibilities  from  the  point  of 
view  and  out  of  the  eyes  of  his  prospective  buyers. 

Here  is  a  work  and  a  veritable  career  for  a  man  who  is 
willing  to  study  and  to  acquire  more  than  the  average 
knowledge  about  his  product  and  his  new  world  of  activity. 
An  American  who  breaks  hiuLself  out,  so  to  speak,  into 
such  new  spheres  of  activities  as  are  open  to  him  now  m 
Latin  America,  in  Central  or  Southern  Africa,  in  India 
or  in  Russia,  in  China  or  Japan,  will  find  himself  in  need 
of  education  and  social  advantages  far  beyond  those  of 
the  usual  salesman  at  home.  He  may  not  use  in  every 
sale  his  exceptional  knowledge,  but  this  knowledge  is  always 
present  with  him  as  a  background  for  his  judgment,  giving 
him  perspective  and  confidence,  without  which  he  is  doomed 
to  the  ranks  of  mediocrity  in  any  attempt  to  compete  with 
European  salesmen  abroad. 

Something  like  a  year  ago,  a  young  man  came  to  me 
saying  that  he  expected  to  be  sent  to  China  to  sell  motor 
trucks.  He  had  been  successful  in  selling  these  in  the 
United  States,  but  China  was  different.  He  recognized 
the  limitations  of  his  knowledge  regarding  his  new  field 


FOREIGN  SALESMANSHIP  AS  A  CAREER  31 

and  among  questions  which  he  set  himself  to  answer  were 
the  following: 

What  about  the  Chinese — how  have  they  been  accustomed  to 
transport  their  goods?  What  kind  of  roads  are  there  in  China? 
What  are  the  facts  concerning  long  hauls  and  short  hauls,  city 
traffic,  country  traffic  and  present  systems  of  delivery?  What 
of  transportation  in  general?  How  about  the  possibility  of 
training  Chinese  to  drive  motor  trucks?  What  competition  is 
there,  or  is  there  hkely  to  be  in  this  line?  Judging  from  the 
knowledge  of  the  civilization  and  characteristics  of  the  Chinese, 
as  well  as  from  the  experience  of  successful  foreign  activities  in 
this  great  country,  what  would  be  naturally  the  easiest  approach 
to  the  Chinese  business  man? 

This  young  man  spent  his  evenings  for  more  than  a  year 
studying  these  questions.  He  haunted  libraries  and  he 
read  books  without  number,  not  only  relative  to  technical 
mattei-s  and  construction  of  motor  trucks,  but  all  of  the 
available  data  in  relation  to  the  country  in  which  there 
was  a  possibility  of  his  spending  many  years  of  his  life. 
The  customs  of  the  people,  their  religion,  their  literature, 
their  education,  their  arts,  and  their  shop-keeping  propensi- 
ties— all  of  these  subjects  were  grist  for  his  mill.  He 
talked  with  Chinese  students  in  our  colleges  here  in  the 
United  States ;  he  talked  with  laundry-men ;  he  talked  with 
exporters,  Chinese  bankers  and  with  American  traveling 
agents  who  had  spent  years  in  the  country;  he  examined 
pictures  in  magazines  and  art  galleries ;  he  gave  particular 
attention  to  the  subject  of  his  competitors'  lines  already 
having  a  sale  in  China;  he  found  out  the  names  of  firms 
who  had  purchased  them;  he  convinced  himself  that  he 
knew  almost  as  much  about  his  competitors'  trucks  as  he 
did  about  his  own;  he  studied  the  Government  of  China 
and  the  history  of  the  British,  the  French,  the  Japanese 
and  the  American  political  and  trade  relationships  to  this 
country.  He  studied  Chinese  exchange ;  the  shipping  laws ; 
the  use  of  the  compradore.  He  even  became  something  of 
a  specialist  in  pidgin-English  by  conversing  with  sailors 


32         FOREIGN  TRADE  MARKETS  AND  METHODS 

who  had  enlarged  their  vocabularies  in  the  port  cities  of 
the  erstwhile  Manchu  Empire.  When  I  met  him  after  a 
year  of  this  kind  of  training,  the  prospective  foreign  sales- 
man was  in  reality  something  of  a  specialist  upon  his  sub- 
ject. He  seemed  to  exude  China  at  every  pore.  It  took 
only  a  few  moves  of  conversation  to  get  him  started  on 
China  and  motor  trucks. 

This  man  is  going  to  be  a  super-salesman  and  we  foresee 
his  success,  because  he  is  going  to  know  his  subject  in  its 
broad  relationships.  He  is  going  to  be  in  a  position  to 
teach  the  Chinese  something  even  about  themselves  and  the 
possibilities  of  their  commercial  enterprises.  He  is  climb- 
ing rapidly  on  the  higher  rungs  of  the  foreign  salesman- 
ship ladder — the  ladder  of  comprehensive  knowledge.  If 
he  does  not  sell  motor  trucks  he  will  seU  something  else  in 
China,  and  we  predict  that  he  will  succeed  because  he  has 
taken  pains  to  know. 

Such  knowledge  in  a  foreign  seller  of  American  goods  is 
important,  moreover,  because  both  the  manufacturer  and 
the  business  man  at  home,  as  well  as  buyers  abroad,  are 
accustomed  to  depend  upon  such  a  salesman  for  advice  as 
well  as  for  knowledge  about  goods  and  national  conditions. 
These  pioneering  men  of  "the  sale"  are  judges  of  con- 
ditions industrially,  socially,  and  politically,  in  the  lands 
where  they  are  called  upon  to  serve  and  all  these  con- 
ditions are  vital  to  the  activities  and  prospects  of  trade. 
These  men  are  truly  pioneers,  carrying  their  firm's  goods 
often  for  the  first  time  to  untried  markets.  The  home 
firm  must  depend  upon  their  judgment  bom  of  knowledge 
and  intelligent  measurement  of  markets,  and  these  traits 
are  usually  determining  factors  in  the  success  or  failure 
of  the  house  in  foreign  lands. 

The  future  of  these  foreign  salesmen,  their  earning 
power,  their  careers,  depend  largely  upon  their  super- 
knowledge,  and  their  salesmanship  ability  is  quite  certain 
to  be  interwoven  with  an  executive  and  administrative 
faculty  as  they  grow  in  knowledge  and  experience.  The 
big   foreign  salesman   becomes  the  big  executive  of  the 


ALONG    THE  CANALS  OF    CHINA  WHERE  MODERN  COMMERCIAL  TRAFFIC  IS 
RAPIDLY  TAKING   THE   PLACE    OF   THE    OLD,    LEISURELY   EXISTENCE. 


TR.ANSPORTATION    OF   HIDES   IN   THE    STREETS   OF   CALCUTTA,   INDIA. 
CART   LOADED   READY   TO   MOVE    OFF   TO   DOCKS. 


FOREIGN  SALESMANSHIP  AS  A  CAREER  33 

firm's  branch  house,  while  the  narrow  gauge  salesman  who 
has  failed  to  see  his  chance  is  called  home,  often  under  a 
cloud  of  failure. 

** Knowledge  is  power,"  and  never  more  powerful  than 
when  applied  to  the  selling  of  American  products  in  foreign 
lands. 

Another  realm  in  which  the  foreign  salesman  must  be 
equipped  is  that  of  current  trade  events  and  financial 
conditions  both  at  home  and  abroad.  For  example,  the 
man  who  is  sent  out  from  his  home  office  in  the  years  of 
1920-1921  to  Central  or  South  America,  or  to  some  Euro- 
pean or  Asiatic  post,  would  be  greatly  handicapped  if  he 
did  not  understand  thoroughly  the  question  of  exchange 
and  credits.  He  must  keep  up  on  these  facts  through  the 
newspapers  and  special  Government  and  Board  of  Trade 
reports.  He  should  be  in  touch  with  the  Federal  Reserve 
Board's  action  relative  to  banks  in  the  curtailing  of  loanS 
for  speculative  purposes.  He  should  be  familiar  with  such 
measures  as  the  Webb  Bill,  the  Edge  Act,  the  Seaman's 
Act,  the  Jones  Bill,  tariff  measures  and  cable  legislation 
and  he  should  know  the  latest  facts  relative  to  the  United 
States  Shipping  Board's  policy  concerning  overseas  car- 
riers. Current  labor  questions  should  be  known  by  him  in 
order  that  he  may  compute  their  effect  upon  manufacturers 
and  the  sale  of  his  products  abroad.  If  he  is  selling  steel, 
he  should  know  that  the  steel  strike  (1920)  curtailed 
production  probably  3,000,000  tons  and  that  it  was  six 
months  before  the  industry  caught  up  with  its  orders. 

This  man  should  not  go  out  without  having  a  general 
idea  of  the  railroad  situation  in  this  country,  for  transpor- 
tation at  home,  possible  rates  and  promptness  of  shipment 
relate  directly  to  his  success  or  failure  in  deliveries  of  his 
goods  sold  to  foreign  countries.  Naturally,  he  would  be 
asked,  especially  by  Americans  abroad,  regarding  income 
and  excess  profits  taxes,  as  well  as  the  results  of  such 
meetings  as  the  National  Foreign  Trade  Council  conven- 
tions, Pan-American  Financial  conferences,  findings  of 
Interstate  Commerce,  and  the  Federal  Trade  Commission's 


34         FOREIGN  TRADE  MARICETS  AND  METHODS 

resolutions.  He  should  know  conditions  relative  to  political 
radicals  in  the  United  States  as  they  affect  labor  and 
imrest ;  market  conditions  as  to  coal ;  cable  conditions ; 
as  well  as  knowing  influences  affecting  commodities,  such 
as  oil  used  increasingly  as  fuel  for  ships.  All  of  these 
subjects  are  facts  germane  to  his  business  of  selling  and 
deliveries. 

It  is  taken  for  granted  that  if  the  man  is  going  to  a 
Spanish  or  French  speaking  country  he  has  become  suflB- 
ciently  familiar  with  the  languages  of  these  countries  to 
secure  portions  of  his  current  information  regarding  these 
lands  from  the  foreign  representatives  in  Consulates  and 
in  various  foreign  organizations  here  at  home.  In  other 
words,  the  foreign  salesman  should  be  so  capable  through 
his  industrious  and  thoughtful  contact  with  current,  finan- 
cial and  industrial  affairs,  that  he  may  be  able  to  form 
correct,  and  as  is  often  required,  rapid  decisions  when  out 
of  touch  with  the  home  office  and  when  often  important 
undertakings  depend  solely  upon  his  judgment  and  compre- 
hensive business  knowledge. 

In  the  foreign  field  even  more  strictly  than  at  home  the 
general  character  and  honesty  of  the  representative  of  an 
American  firm  are  inevitable  factors  of  success  or  failure. 
There  has  been  all  too  much  criticism  abroad  by  foreign 
competitors  against  our  foreign  salesmen  in  certain  parts 
of  the  world  who  have  been  sent  out  without  proper  selec- 
tion or  equipment  by  some  of  our  American  houses.  These 
have  been  called  "fly  by  night"  concerns,  and  in  many 
cases  it  has  not  been  realized  that  the  "repeat  orders"  are 
the  important  elements  in  building  up  foreign  American 
trade  and  that  these  orders  never  materialize  if  the  charac- 
ter and  honesty  of  the  firm  through  the  personality  of  the 
salesman  is  questionable  by  reason  of  the  first  contact.  So 
important  is  this  matter,  to  the  Latin  American  countries 
for  example,  that  committees  of  business  men  were  formed 
in  Argentina  previous  to  the  organization  of  the  present 
effective  Argentine-American  Chamber  of  Commerce  for 
the  purpose  of  keeping  surveillance  over  American  busi- 


FOREIGN  SALESMANSHIP  AS  A  CAREER  35 

ness  houses  and  agents  doing  business  in  that  country, 
guarding  against  infraction  of  accepted  rules  and  regula- 
tions of  intertrade  between  the  two  nations.  This  matter 
was  considered  at  length  in  the  second  Pan-American  Con- 
ference. 

It  is  particularly  true  in  Latin  America,  where  personal 
likes  and  dislikes  are  frequently  determining  factors  in 
trade  relations,  that  the  foreign  salesman  should  be  the 
kind  of  man  whose  word  is  as  good  as  his  bond  and  in 
whom  the  confidence  of  the  Latin  American  can  be  placed, 
not  only  for  one  year,  but  for  the  years  to  come.  South 
Americans  are  particularly  averse  to  doing  business  with 
new  salesmen,  and  if  a  man  has  proved  his  worth  and  has 
once  gained  confidence  they  would  much  prefer  to  deal 
with  such  a  man  than  to  change  to  another  firm,  even 
though  there  might  be  a  prospect  of  certain  economic 
advantages. 

There  is  hardly  a  characteristic  of  the  foreign  salesman 
more  valuable  than  the  reputation  of  telling  the  strict  truth 
regarding  his  goods  and  his  house,  and  thereby  gaining 
in  the  long  run  a  confidence  that  is  one  of  the  most  valu- 
able assets  in  foreign  commerce.  That  honesty  proves  to 
be  the  best  policy  among  Americans  doing  business  abroad, 
was  suggested  from  a  somewhat  curious  angle  in  an 
incident  told  me  while  I  was  in  Brazil,  regarding  a  visit 
of  the  President  with  his  staff  to  one  of  the  foreign  enter- 
prises. The  Brazilian  President  had  seen  a  certain  change 
which  it  was  necessary  to  make  in  a  power  plant  in  order 
to  conform  to  Brazilian  law.  He  brought  it  to  the  atten- 
tion of  the  manager  who  happened  to  be  an  American, 
and  the  manager  said  that  he  would  attend  to  it.  Some 
time  afterwards  the  President  called  his  secretary  and 
asked  him  if  his  order  had  been  carried  out,  to  which  the 
Brazilian  Secretary  replied: 

Why,  it  must  have  been,  because  the  manager  said  it  would 
be  done,  and  Americans  always  tell  the  tnith. 


36         FOREIGN  TRADE  MARKETS  AND  METHODS 

The  President  thought  for  several  minutes  and  then  said: 

Yes,  the  Americans  seem  to  tell  the  truth,  because  they  wish 
to  save  time  and  time  is  of  great  importance  to  them.  They  have 
learned  that  the  man  who  does  not  tell  the  truth  loses  a  lot  of 
time  because  he  is  sure  sooner  or  later  to  be  found  out  and  be 
obliged  to  make  explanations  and  thereby  lose  more  valuable 
time  than  he  would  if  he  had  told  the  truth  in  the  first  place. 

We  have  some  doubts  as  to  the  corroetness  of  the 
Brazilian  psychology  concerning  the  American  character 
in  this  case,  but  he  certainly  wa.s  right  in  his  conclusion 
that  the  foreigner  abroad  must  somehow  build  up  a  repu- 
tation for  tnith  telling  if  he  expects  to  succeed. 

It  is  essential  also  to  lay  emphasis  upon  the  attention 
that  the  foreign  salesman  must  give  to  the  maintenance  of 
his  character  when  far  from  home  and  in  an  alien  land, 
surrounded  by  new  conditions  and  often  by  customs  that 
make  it  easy  to  depart  from  habits  of  life  which  are  easily 
followed  at  home.  Those  who  have  traveled  abroad  need 
not  be  told  of  the  wrecks  of  American  manhood  that  have 
occurred  in  certain  foreign  cities,  simply  because  the  man 
has  lacked  the  vstrcngth  and  power  of  will  to  maintain  his 
moral  integrity  abroad.  The  foreign  salesman  who  in- 
dulges in  habits  of  gambling  or  feels  that  he  must  fall 
into  the  social  customs  practiced  by  some  of  the  foreign 
business  men  frequenting  the  Far  East  or  West  Africa  for 
example  during  the  last  generation,  is  undercutting  not 
only  his  usefulness,  but  his  career.  The  American  foreign 
salesman  who  goes  out  to  other  lands  must  guard  rigidly 
his  own  habits  in  relation  to  the  drink  problem  lest  the 
natural  tendency  of  human  nature  carry  him  to  excCvSS. 
As  truly  as  the  Ambassador,  the  Foreign  Minister,  the 
Consul,  or  the  Commercial  Attache  cany  in  their  person- 
alities and  acts  the  good  name  of  the  United  States,  so  does 
the  foreign  salesman  hold  in  his  keeping  the  national  good 
will  and  reputation  of  his  country.  In  the  field  of  foreign 
trade  in  the  next  twenty-five  years  the  United  States  will 
be  tested  as  perhaps  never  before  in  its  history,  and  in  no 


FOREIGN  SALESMANSHIP  AS  A  CAREER  37 

wise  more  truly  than  in  the  maintenance  of  those  ideals  of 
probity,  business  integrity  and  unselfish  ambition  which  have 
made  our  country  conspicuous  among  nations  during  the  war. 

It  is  well  for  salesmen  to  remember  that,  in  offermg 
goods,  the  salesman  sells  himself  first  and  if  he  is  the  real 
thing,  his  product  and  house  will  not  lack  acceptance  in 
foreign  communities. 

Granted  that  this  salesman  plus,  who  in  Kipling's  phrase 
•'goes  up  to  occupy"  his  rightful  place  in  the  sun,  pos- 
sesses a  broad  knowledge  and  adds  to  it  the  ability  to  sell 
together  with  moral  integrity,  he  has  yet  to  possess  or  to 
acquire  a  pearl  of  great  price  for  a  foreign  salesman, 
namely — manners.  _     . 

An  unimportant  and  trivial  matter,  you  say,  but  it  is 
in  these  so-called  unimportant  and  small  adjustments  that 
men  succeed  or  fail  abroad  as  at  home.  George  J.  Whelan 
who  founded  and  built  up  a  company  that  operates  1300 
stores  in  400  cities  (United  Cigar  Stores)  says: 

We  found  out  that  people  dislike  steps,  so  we  put  all  our 
stores  on  a  level  with  the  street ;  one  step  can  be  counted  on  to 
lose  just  one  customer  a  day  and  every  additional  step  just  so 
many  more.  We  found  in  this  business  that  it  is  necessary  to 
make  things  as  easy  and  as  pleasant  as  possible. 

In  this  connection  it  might  be  noted  that  one  of  the  large 
cigar  store  men  reported  "a  decided  increase  in  business" 
after  they  had  established  the  policy  on  the  part  of  every 
one  of  their  employees  of  saying  "thank  you"  to  their 
customers  after  a  purchase. 

This  emphasis  upon  the  amenities  of  life  as  required  by 
the  foreign  salesman  is  vital.  What  enterprise  requires 
more  generally  the  right  attributes  for  first  impress  than 
the  trade  of  the  man  who  sells  goods  and  service  to 
foreigners,  whose  confidence  first  of  all  must  be  won  ?  For 
him  the  New  England  schoolmaster's  verse  to  his  graduates 
is  significant : 

I  send  you  forth.    Go,  lose  or  conquer  as  you  can, 

But  if  you  fall  or  if  you  rise,  be  each,. pray  God,  a  gentleman. 


t  4  2  *>  •/  r\ 


38         FOREIGN  TRADE  MARKETS  AND  METHODS 

The  man  who  goes  forth  to  other  lands  with  what  physi- 
cians call  "mogaloccphalous,"  thinking  to  "put  it  over'* 
by  his  rough  and  ready  aggressiveness,  despising  the  social 
graces,  will  come  home  shortly  a  sadder  but  a  wiser  man. 

The  foreign  seller  will  be  called  upon  to  match  his  wits 
and  personality  against  the  men  who  have  inherited  ancient 
and  cultured  civilizations,  civilizations  in  existence  cen- 
turies before  our  own  country  was  discovered.  He  will 
be  called  upon  to  do  business  with  men  who  are  often  more 
broadly  intelligent,  more  cosmopolitan,  more  urbane,  more 
civil,  more  ceremonious  and  more  conscious  of  human 
dignity  than  are  we  as  a  rule  here  in  this  new  virile  land 
of  youth  and  aggressive  achievement. 

A  high-class  Chinese,  commenting  to  me  upon  the  acts 
of  a  brusque,  loud-spoken  foreign  salesman  who  had  just 
visited  him,  said : 

It  takes  centuries  to  breed  culture.  Your  western  countries 
are  yet  too  young  to  attain  it.  We  should  not  expect  too  much 
from  you. 

In  South  America  some  years  ago  we  were  somewhat 
amused  at  the  position  of  a  Latin  American  who  was 
chairman  of  a  reception  committee  to  receive  a  delegation 
of  business  men  from  the  United  States.  He  was  uncertain 
as  to  whether  certain  members  of  this  delegation  would 
know  how  to  conduct  thenxselves  at  a  reception  composed 
of  some  of  the  prominent  officials  of  his  country,  since,  he 
said  in  explanation: 

I  infer,  judging  from  certain  business  men  whom  I  have  met 
in  the  North,  that  social  customs  and  manners  of  the  drawing 
room  are  considered  too  trivial  for  the  American  business  man 
to  bother  with;  yet  with  us,  they  are  very  important  as  they 
reveal  the  soul  and  breeding  of  the  individual. 

If  there  is  any  "uncomfortable  work  of  God"  to  a  cul- 
tured Latin  or.  Oriental,  it  is  an  effusive,  peppery,  pushing 
and  aggressively  patriotic,  ill-mannered  man  or  w^oman. 


FOREIGN  SALESMANSHIP  AS  A  CAREER  39 

No  amount  of  "efficiency"  can  make  up  for  the  lack  of 
taste  in  dress  or  deportment  of  a  representative  of  an 
American  house  abroad.  It  is  all  very  well  to  be  patriotic 
and  work  off  sentiments  about  "God's  Country"  while 
here  at  home,  but  the  man  who  follows  this  custom  abroad 
is  usually  spoken  of  as  "Yankee,"  or  "Gringo,"  or  "Pork 
Packer,"  or  "Bounder,"  or  "American  Millionaire," 
according  to  the  latitude  and  longitude  of  the  earth  he 
happens  to  be  in.  Usually  when  these  terms  are  used 
relative  to  an  American  they  are  not  intended  to  be  com- 
plimentary. 

We  are  inclined  to  believe  from  our  observations  that 
the  foreign  salesman  prejudices  his  customer  against  him 
by  too  much  talk.  It  is  well  to  remember  the  old  proverb 
of  Josh  Billings,  who  said: 

A  bore  is  a  man  who  talks  so  much  about  himself  that  you 
can't  talk  about  yourself. 

One  of  the  most  successful  foreign  salesman  whom  I  know 
is  a  very  good  listener.  He  has  extremely  quiet  manners 
and  never  interrupts  or  gives  his  prospective  buyer  a  feel- 
ing that  he  does  not  respect  highly  his  opinions  and  ideas. 
He  wins  by  his  reserve  rather  than  by  his  pushing  ways. 

In  view  of  the  extreme  importance  of  this  subject  of 
deportment,  as  related  to  foreign  salesmanship,  we  are 
tempted  to  add  a  decalogue  of  "don'ts": 

A  Foreign  Salesman's  Decalogue: 

First:  Thou  shalt  not  address  thy  prospective  purchaser 
in  what  is  to  him  an  alien  tongue!  (This  is  to  lose  your 
case  before  you  begin  to  plead  it.) 

Second:  Thou  shalt  not  yell  at  thy  customer  as  though 
you  were  in  a  boiler  factory !  (Foreigners  are  not  usually 
deaf.) 

Third:  Thou  shalt  not  tiy  to  hustle  your  customer  be 
he  Latin,  Briton,  Oriental,  Spanish  or  Portuguesc-Ameri- 


40         FOREIGN  TRADE  MARKETS  AND  METHODS 

can!     (This  is  one  of  the  unpardonable  sins  of  the  foreign 
salesman.) 

Fourth:  Thou  shalt  not  lie  about  thy  goods,  or  thy  firm, 
or  thy  income,  or  thy  personal  achievements!  (Emerson 
said,  "What  you  are  makes  so  much  noise  that  I  can't  hear 
what  you  say.") 

Fifth:  Thou  shalt  not  wear  clothes  that  herald  thy 
approach  by  reason  of  the  loudness  of  their  color,  neither 
shalt  thou  wear  thy  hat  on  thy  head  nor  thy  cigar  in  thy 
mouth  when  entering  a  foreigner's  office! 

Sixth:  Thou  shalt  not  wax  aggressively  patriotic  in  the 
presence  of  a  foreigner,  nor  shalt  thou  draw  invidious 
comparisons  between  Paris  and  New  York  or  between 
Buenos  Aires  and  Buffalo! 

Seventh:  Thou  shalt  not  call  Latin  Americans  "thinly- 
veiled  Indians,"  or  Orientals  "yellow  men,"  or  East 
Indians,  "Eurasians,"  or  Italians,  "Wops,"  or  in  any  wiso 
deal  expansively  with  the  color  of  thy  customers'  skins! 
(Remember  that  there  is  no  color  line  in  foreign  trade.) 

Eighth:  Thou  shalt  not  vaunt  thyself  or  be  puffed  upl 
(You  can't  beat  the  Englishman  in  conceit — so  why  tiy 
to  compete  with  him?) 

Ninth:  Thou  shalt  not  bear  false  witness  against  thy 
competitor ! 

Tenth:  Thou  shalt  not  criticise  adversely  thy  customer's 
morals,  thy  customer's  clothes,  his  amusements,  his  food, 
his  house,  nor  his  women,  nor  his  trade  methods,  nor  his 
religion!  (Mark  Twain  said  that  the  chief  irreverence  is 
irreverence  for  another  man's  gods.) 

If  this  were  not  a  decalogue  we  would  be  tempted  to 
add  as  a  rider  to  these  rules,  an  eleventh  positive  command, 
namely:  Thou  Shalt  Put  Thyself  in  Thy  Customer's 
Place! 


CHAPTER  IV 

EXPORT  ADVERTISING:  ITS  NECESSITY  AND  HOW 
ACCOMPLISED 

When  the  American  uses  the  word  ** advertising,"  he 
understands  with  peculiar  cxactne&s  what  he  means.  Ad- 
vertising is  in  the  American  domain — it  is  a  medium  in 
which  he  is  at  home.  While  it  may  not  be  said  that 
Americans  originated  advertising,  nevertheless  it  is  true 
that  no  race  of  men  have  been  more  inventive  or  more 
successful  in  this  field. 

The  American  phrase,  "It  pays  to  Advertise,"  has  be- 
come a  modern  business  proverb.  We  believe  in  it  and  we 
seem  capable  of  endless  variation  in  our  genius  for  visualiz- 
ing in  ink,  in  pictures  and  in  wood  and  stone  that  which 
we  wish  to  impress  upon  the  thought  and  imagination  of 
men. 

Advertising  has  become  an  art  and  a  profession  in  the 
United  States.  It  is  estimated  that  nearly  a  half  billion  of 
dollars  are  spent  yearly  in  a  myriad  of  ways  to  tell  to  the 
public  the  story  or  the  dream  of  a  man  who  has  something 
to  sell.  By  this  comparatively  new  vocation  many  thous- 
ands of  American  men  and  women  gain  a  livelihood.  What- 
ever we  may  be  able  to  learn  from  the  Old  World — and 
that  is  much— we  do  not  cross  the  seas  to  get  incentive  or 
examples  of  how  to  advertise  in  America. 

But  here,  as  in  many  another  case,  our  unquestioned 
success  at  home  may  prove  a  stumbling  block  when  we 
endeavor  to  transfer  our  native  success  to  foreign  fields. 
The  war  already  has  taught  us  that  one  nation's  method  of 
doing  things  successfully  at  home  does  not  prove  success 

41 


42        FOREIGN  TRADE  MARKETS  AND  METHODS 

abroad,  however  mnch  we  may  think  these  methods  ought 
to  do  so.  The  Englishman  with  his  negative  bent  of  mind 
and  mental  reserve,  the  emotional  and  artifjtic  tempered 
Latin,  the  indirect  and  meditative  Oriental  do  not  look  at 
the  world  and  things  as  we  do.  They  cannot  and  never 
will,  because  racially  and  traditionally  for  centuries  upon 
centuries  their  starting  points  have  been  different.  To  fool 
ourselves  about  this  point  is  frequently  the  first  and  fatal 
mistake  of  the  advertiser  abroad. 

It  may  be  true  that  down  in  tlie  depths  of  their  souls  all 
men  everywhere  are  kin,  but  when  we  strive,  either  by 
Leagues  of  Nations  or  Leagues  of  Advertisers  to  fit  one 
instrumentality  to  suit  all  races,  we  are  confronted  with 
a  task  more  difficult  than  were  the  seven  labors  of  Hercules. 
In  advertising,  as  in  politics,  "When  in  Rome  we  must  do 
as  the  Romans  do,"  and  the  same  applies  to  Valparaiso, 
Osaka,  Calcutta,  liarcelona,  or  Peking. 

Domestic  advertising  and  export  advertising  are  two  dif- 
ferent things.  It  may  be  of  help  to  consider  some  of  the 
general  principles  that  apply  to  advertising — American 
advert isin<^  particularly — when  it  goes  out  to  win  the  world 
for  American  products  and  American  enterprises. 

There  are  different  ways  taken  by  different  nations  to 
exhibit  their  racial  and  historical  traits,  and  these  differ- 
ences must  be  known  by  the  successful  advertiser.  If  the 
advertising  manager  does  not  have  the  time  or  the  inclina- 
tion to  find  out  these  differences  he  should  get  the  advice 
of  some  thoughtful  and  astute  export  manager  or  agent 
who  has  lived  or  traveled  extensively  in  the  country  for 
which  advertising  is  being  prepared.  For  example,  we 
know  of  a  certain  manufacturer  who  poured  thousands  of 
dollars  down  a  pipe  that  had  no  end,  charging  it  np  to 
** Export  Expense,"  before  he  learned  that  the  whole  tex- 
ture of  his  argument  was  wrong.  He  was  advertising  a 
product  in  a  countiy  dominated  by  British  sentiment,  using 
glaring  statistics  and  playing  up  vast  income  figures  and 
material  wealth  of  the  United  States — things  which  are 
anathema  to  the  usual  British  mind.    Make  no  mistake — 


EXPORT  ADVERTISING  43 

no  nationals  are  indifferent  to  economic  success!  Gold  is 
almighty  the  world  around  and  no  disaster  is  more  tragic 
than  financial  incompetence.  Yet  it  is  a  fact  that  certain 
Europeans  still  think  of  us  chiefly  as  "Pork  Packers"  and 
"People  of  the  Dollar  Mark,"  while  "Americans"  in 
Japan  and  other  places  in  the  East  are  synonymous  with 
"Millionaires." 

These  verj-  nations  are  not  averse,  however,  to  getting 
our  dollars  and  their  old  world  ideals  are  utterly  dependent 
upon  building  securely  an  economic  and  industrial  founda- 
tion. The  difference  is  one  of  method  and  often  of  expres- 
sion and  restraint  in  playing  up  facts.  This  point  was 
brought  out  in  a  certain  experience  in  the  Far  East.  "We 
were  traveling  on  a  small  steamer  between  Korea  and 
Port  Arthur  on  the  Yellow  Sea.  Our  companions  were 
a  Scotchman  and  his  son,  both  of  whom  had  been  rather 
jocosely  picturing  Americans  as  somewhat  too  eager  in 
their  personal  conversation  to  emphasize  how  much  they 
were  worth  and  to  play  up  the  material  side  of  every- 
thing. Naturally  we  were  upholding  our  country  as  best 
we  could  by  the  argument  of  a  young  nation  developing 
first  its  natural  resources,  building  first  the  strong  economic 
bases  of  its  civilization,  and  then  passing  on  to  the  flower- 
ing of  literary,  cultural  and  artistic  pursuits.  It  almost 
seemed  that  we  had  produced  an  argument  of  some  effect, 
even  upon  the  Scottish  mind,  when  from  the  midst  of  a 
Cook  party  at  the  other  end  of  the  dining  saloon  a  shrill 
Yankee  voice  pierced  the  air  with  the  question,  "Say  Bill, 
what  does  a  porterhouse  steak  cost  at  the  Holland  House?" 
The  incident  was  such  a  manifest  point  for  our  opponent 
that  we  felt  inclined  to  drop  the  subject  for  the  time  being. 

In  South  America  the  dignity  of  advertisement  is  more 
likely  to  win  deserved  attention.  There  is  not  shown  there 
the  admiration  for  yellow  and  sensational  advertising 
existing  in  some  countries.  One  of  the  largest  newspapers 
in  Latin  America  makes  its  advertising  display  In  a  chaste, 
dignified  frame  less  than  two  feet  square  in  front  of  its 
large  building.     To  plaster  over  the  side  of  the  beautiful 


44         FOREIGN  TRADE  MARICETS  AND  METHODS 

building  glowing  placards  with  electric  letters  a  foot  high 
would  be  as  inconceivable  as  it  would  seem  to  be  devoid  uf 
taste;  and  as  Emile  Boutroux,  the  distinguished  member 
of  the  French  Academy,  once  said  to  me,  when  I  asked 
the  characteristic  of  the  French  people: 

The  Latins  place  a  great  emphasis  on  good  taste. 

A  prominent  Peruvian  citizen  led  me  out  one  day  in 
the  city  of  Lima  near  the  city  square  and  stopped  beside 
a  high  wall  on  one  side  of  the  old  cathedral  where  some 
enterprising  and  i)ushing  countryman  of  mine  had  pur- 
chased space  upon  which  to  place  a  life-size  portrait  of  the 
familiar,  undying  face  of  Lydia  E.  Pinkham — with  her 
world-famed  vegetable  compound  bountifully  described. 
The  Peruvian  did  not  actually  accuse  us  of  poor  taste  in 
advertising,  but  his  look  said: 

By  the  bones  of  Pizarro  which  lie  in  dust  less  than  fifty  feet 
away  in  the  great  dignifie<l  church  of  our  Spanish  ancestors, 
how^  could  any  one  be  so  devoid  of  taste! 

If  the  advertising  agent  who  placed  that  sign  in  that 
particular  place  had  taken  pains  to  confer  with  almost 
any  American  living  in  Lima,  he  would  have  been  saved 
the  mistake  of  creating  an  advertising  chasm  almost  too 
great  for  any  sales  argument  to  bridge. 

Hugh  Kahler  has  defined  advertising  as 

A  force  which  makes  one's  goods  less  apt  to  be  refused  when 
offered. 

The  study  of  surface  differences  for  the  advertiser  to 
consider  in  foreign  export  exploitation  includes  such  ques- 
tions as  the  following: 

1.  Does  sensational  advertising  or  quiet  metliods  prove 
most  desirable  to  those  whose  attention  and  good-will 
would  be  captured? 


EXPORT  ADVERTISING  45 

2.  What  is  the  prevailing  historical  tradition  of  these 
people  and  how  does  it  differ  from  that  of  my  own 
land? 

3.  What  is  the  religion  of  these  people  and  what  are 
their  sensitive  nerves  ? 

4.  Do  these  people  like  Americans?  If  not,  how  can  we 
word  our  advertising  so  as  to  least  offend? 

5.  What  local  events  afford  the  most  opportune  peg  upon 
which  to  hang  the  advertisement? 

Another  extremely  important  means  of  presenting  export 
enterprises  to  people  in  other  countries  is  through  the 
medium  of  the  personal  letter.  Doubtless  the  salesman  in 
his  personality  and  ability  of  presentation  provides  the 
best  means  of  advertising  which  any  firm  possesses,  but 
nevertheless,  it  is  possible  to  transfer  much  of  this  power 
or  personal  interest  and  individuality  through  the  type- 
written word.  While  correspondence  in  general  is  an  art, 
as  an  aid  to  export  advertising  it  is  a  fine  art.  It  is  more 
personal  and  more  intimate  than  the  printed  advertising 
word  and  for  this  reason  it  should  be  more  carefully 
studied.  A  few  lapses  in  a  letter  have  spoiled  many  a  good 
prospective  contract.  A  firm  engaged  in  selling  goods 
abroad  should  have  a  definite  policy  about  its  correspond- 
ence as  clear  cut  as  any  other  plan  for  the  promotion  of 
sales, 

I  heard  recently  of  a  firm  which  had  established  a  kind 
of  school  or  conference  for  the  training  of  those  whose 
duty  it  was  to  correspond  with  clients  or  prospective  pur- 
chasers in  foreign  countries.  In  this  way  it  became  pos- 
sible for  each  letter  sent  out  to  reflect  the  spirit  of  the 
house  and  obviated  the  danger  of  cross  purposes  which 
often  appear  in  correspondence  of  different  departments 
in  the  same  establishment. 

This  correspondence  should  uniformly  reflect  courtesy, 
good  will,  clearness  and  accuracy,  not  forgetting  the  use 
of  terms  in  the  address  and  at  the  end  of  the  letter  which 
are  familiarly  used  by  the  people  in  the  country  to  which 


46        FOREIGN  TRADE  MARKETS  AND  METHODS 

the  correspondence  is  addressed.  The  matter  of  clearness 
cannot  be  over-emphasized  in  letter  writing  to  people 
abroad.  John  Locke  once  said  that  the  most  important 
essential  of  any  successful  man  consists  in  "clear  ideas." 
In  the  transference  of  thoup;ht  between  peoples  speaking 
different  tongues  and  inheriting  ditfcrent  traditions,  this  is 
even  more  vital  than  in  correspondence  at  home. 

We  think  of  an  instance  in  which  it  cost  a  house  several 
hundred  dollars  in  cables  and  other  expense  in  filling  an 
order,  simply  because  the  original  letter  containing  the 
request  was  indefinitely  worded  and  could  be  interpreted 
in  one,  two,  or  three  ways.  Carelessness  and  stupidity  are 
inexcusable  attendants  of  any  business  and  particularly  is 
this  true  in  letters  where  face  to  face  explanations  cannot 
be  made. 

The  consideration  of  the  point  of  view  of  the  people  to 
whom  one  writes  is  also  of  vital  importance  in  export 
letters.  The  Orientals  as  well  as  Latins  are  not  inclined 
to  be  impressed  with  the  short,  crisp  and  often  abrupt  notes 
of  the  American  or  English  business  man.  A  certain 
amount  of  polish  and  ceremony  is  as  necessary  in  a  busi- 
ness letter  to  the  Oriental  or  to  the  Latin  American,  as  it 
would  be  in  personal  address.  To  ignore  this  through  any 
obstinate  prejudice  regarding  our  own  ways  of  doing  things 
is  to  be  shortsighted  and  is  usually  a  confession  of  ignorance 
not  easily  overlooked  by  a  person  of  another  nation,  who 
is  inclined  to  study  these  small  points  with  care. 

Wherever  possible  the  reader's  language  should  be  used 
and  as  far  as  possible  the  writer  .should  mentally  put  him- 
self in  the  place  of  the  person  he  is  addressing. 

Walter  F.  Wyman,  in  his  book  entitled  Direct  Exporting, 
cites  a  sales  letter  addressed  to  a  prominent  Calcutta 
merchant,  which  began: 

Bill  Jones  of  Kalamazoo  made  .$1800  in  one  month  with  our 
patent  back-aetioned  potato  peeler.  Can't  you  do  as  well  as 
Bill? 

Mr.  Wyman  suggests  that  the  situation  be  reversed  and 


EXPORT  ADVERTISING  47 

Mr.  Manufacturer  in  St.  Louis  receives  from  Calcutta  some 
such  letter  as  this: 

Kawa  Dhurur  of  Thalra  Patau  made  Ks.  3600  in  one  purulia. 
Can't  you  sell  as  many  laces  as  Kawa? 

Naturally  such  letters  as  these,  and  they  are  not  infrequent, 
received  on  either  side  of  the  export  and  import  lines,  are 
useless  except  for  joke-making  purposes, 

Mr.  Wyman  in  thLs  book  also  suggests  ten  points  of 
distinction  which  characterize  a  successful  letter  written 
by  a  New  York  man  to  a  Melbourne  firm,  showing  ten 
"distinguishing  trifles"  very  important  for  successful 
export  advertising  in  letters  to  British  clients : 

24th  Januarj',  1919. 
Messrs.  Hilliard  Bros  &  Co.,  Ltd., 

716  Collins  Street, 
Melbourne,  Vic. 
Dear  Sirs: 

I  would  appreciate  the  favor  of  your  examination  of  the 
samples  of  Meteor  lockets,  which  are  going  on,  duty  paid,  by  this 
post. 

If  you  will  show  these  to  some  of  your  customers  who  enjoy 
good  craftsmanship,  I  would  be  doubly  grateful  for  their  com- 
ments. 

It  has  not  been  my  good  fortune  to  visit  Melbourne  since 
1908,  and  in  my  five  trips  I  never  chanced  to  represent  any 
jewelry  linos.  This  I  certainly  regret  now,  for  with  your  many 
years  of  experience  in  Melbourne  in  the  jewelry  line,  a  personal 
acquaintance  would  make  me  feel  that  I  was  not  imposing  on 
your  good  nature  in  my  queries. 

It  would  naturally  be  a  pleasure  to  me  to  find  that  the  lockets 
will  appeal  to  you  as  something  worth  selling,  and  the  attached 
sheet  will  give  prices,  terms  and  all  shipping  details,  arranged 
to  show  you  the  per  cent  laid  down  on  several  other  lines  as 
well. 

Are  you  by  any  chance  allied  with  Messrs.  Hilliard  &  Sons, 
Ltd.,  of  Glasgow  ?    If  so,  possibly  advantageous  shipping  arrange- 
ments could  be  made  through  my  Glasgow  connections^ 
Yours   faithfully, 

James  M.   Jones 


48         FOREIGN  TRADE  MARKETS  AND  METHODS 

The  ten  points  of  distinction : 

1.  24th  January,  1919. 

2.  Messrs.    (too  often  omitted). 

3.  Favor. 

4.  By  this  post. 

5.  Show. 

6.  Show  the  per  cent  laid  down. 

7.  Glasgow  (not  Glasgow,  Scotland). 

8.  Yours  faithfully. 

9.  Copied. 

10.  The  follow  copy  which  went  to  Messrs.  H'lliard  &  Co., 
Ltd.,  on  the  next  boat. 

One  of  our  American  manufacturers  was  criticised  by 
a  Liverpool  importer  in  these  words : 

Those  Yankees  are  in  so  much  of  a  huny  that  their  goods 
cannot  always  be  just  right.  They  always  bloi  the  signature 
to  typed  letters. 

The  motto  of  one  of  the  leading  American  newspaper 
editors  may  well  be  kept  in  mind  in  this  matter  of  advertis- 
ing through  correspondence — "Accuracy,  Terseness,  Ac- 
curacy." It  is  extremely  important  to  specify  rather  than 
to  assume  in  correspondence.  A  good  motto  is  not  to  take 
anything  for  granted,  but  to  make  the  point  so  clear  that, 
as  Dr.  Lyman  Abbott  once  said : 

Even  my  Aunt  Mary  can  understand  what  I  am  saying. 

Manj'  correspondents  presenting  to  foreign  purchasers 
American-made  goods  are  inclined  to  think  more  of  their 
competitors  than  they  do  of  accurately  describing  their 
product.  As  a  matter  of  fact  the  foreign  buyer  may  never 
have  heard  of  the  article  before  and  emphasis  should  not 
be  laid  upon  a  minor  point  of  advantage  over  some  rival 
article — a  mistake  frequently  made. 

It  goes  almost  without  saying  that  the  more  a  person 
can  reveal  some  distinct  personality  in  his  letter  the  more 


EXPORT  ADVERTISING  49 

effective  it  will  become.  "We  know  of  a  man  who  in  writ- 
ing to  Eastern  native  firms  has  adopted  the  use  of  word 
pictures,  so  common  among  Orientals  in  presenting  their 
ideas.  His  lettei-s  to  an  Oriental  and  to  an  Occidental  are 
as  different  as  two  things  could  possibly  be.  By  travel 
and  study  he  has  caught  the  spirit  of  difference  between 
nationals  and  has  had  the  imagination  and  tact  to  adapt 
himself  to  this  difference.  It  is  hard  to  lay  down  rules  as 
to  the  manner  in  which  this  adjustment  should  be  made  by 
any  particular  individual,  but  unless  the  exporter  and  the 
manufacturer  by  study  and  thought  can  discover  a  way 
for  himself  of  traniiferring  his  thought  so  that  it  goes  with 
emphasis  and  meaning  to  the  mind  of  his  prospective 
client,  he  will  have  failed  in  a  vital  point  of  foreign  trade. 

As  an  advertising  medium  the  House  Organ  has  grown 
apace  during  the  past  decade.  It  is  estimated  that  at 
present  there  are  approximately  two  thousand  house 
organs  published  in  the  United  States.  These  magazines 
vary  widely,  some  being  aimed  particularly  to  develop  the 
morale  and  esprit  de  corps  of  the  organization  itself  by 
giving  knowledge  of  the  work,  while  others  are  aimed 
directly  at  the  sales  organization  and  have  as  an  object 
the  increasing  of  the  firm's  profits.  Some  of  these  maga- 
zines are  edited  with  care  while  others  are  left  to  the  odds 
and  ends  of  time  which  may  possibly  be  given  to  them  by 
an  export  manager.  For  large  business  organizations 
engaged  in  trade  abroad  some  such  advertising  medium  is 
inevitable  as  a  means  of  cementing  the  company  and  focus- 
ing attention  upon  the  outstanding  policies  and  facilities 
for  handling  products.  This  subject  is  treated  in  detail 
in  another  section,  but  it  may  be  important  to  add  here 
that  its  effectiveness  as  an  advertising  medium  depends 
largely  upon  the  way  in  which  the  officers  and  executives 
of  any  given  firm  accept  it  as  a  definite  means  of  advertis- 
ing and  propaganda,  and  utilize  it  for  their  particular 
specialties. 

More  and  more  firms  engaged  in  foreign  trade  are  plac- 
ing emphasis  on  local  advertising  in  foreign  markets.    This 


50         FOREIGN  TRADE  MARIvETS  AND  METHODS 

in  especially  desirable  when  the  firm  has  an  agent  or  a 
special  office  director  who  understands  not  only  the  lan- 
guage of  the  people,  but  their  general  attitude. 

There  is  little  doubt  but  that  the  export  policy  of  export 
firms  will  include  increasingly  during  the  next  few  years, 
the  planning  of  systematic  and  effective  advertising  from 
local  foreign  centers  in  various  languages,  using  as  a  back- 
ground tlic  knowledge  of  the  particular  locality  i)ossessed 
by  local  representatives  of  American  firms. 

In  tliis  entire  matter  as  in  all  trading  with  foreign 
nations,  the  spirit  and  the  personality  of  the  salesman  or 
foreign  representative  is  the  central  issue.  In  export 
advertising  the  manufacturer  or  tlie  salesman  sells  him- 
self; his  absolute  honesty,  his  straightforwardness,  the 
desire  to  live  and  let  live,  and  his  faculty  of  sympathetic 
imagination,  if  he  i)osses.ses  these  traits,  will  find  means  of 
expression  in  every  form  of  presentation  which  he  makes 
of  his  goods,  either  at  home  or  abroad.  The  exporter's 
ideal  is  certain,  sooner  or  later,  to  color  and  to  determine 
the  success  of  his  advei-tising  propaganda. 

The  value  of  advertising  is  based  upon  confidence  in  the 
advertiser.  The  client  is  always  trying  to  visualize  behind 
the  advertisement  the  motive  and  the  character  of  the 
seller  or  the  exporter.  That  export  advertising  which  can 
combine  up-to-date  and  carefully  adjusted  methods  with 
a  genuine,  whole-hearted  purpose  on  the  part  of  the 
exporter  will  not  fail  for  long  to  secure  broad  and  enlarg- 
ing markets. 


CHAPTER  V 
TRAINING  FOR  FOREIGN  COMMERCE 

The  world  is  founded  on  thoughts  and  ideas,  not  on  cotton  and 
iron. — Emerson. 

It  is  a  national  American  characteristic  to  do  everything 
excessively  and  not  to  do  anything  by  halves.  Of  late  this 
trait  of  enthusiastic  acceptance  of  opportunity  in  foreign 
commerce  has  captured  a  considerable  and  growing  por- 
tion of  our  population.  Our  youth  returaed  from  France 
with  a  new  vision  of  world  races  and  world  possibilities. 
They  besieged  our  great  export,  shipping  and  banking 
houses  for  positions  that  would  align  them  with  activities 
abroad.  The  sea  and  ships  have  caught  the  imagination  of 
thousands  of  young  Americans  for  the  first  time  and  South 
America,  South  Africa,  China  and  East  India  already  con- 
tain men  who  have  been  sent  freshly  forth  during  the  past 
two  years  by  American  firms  to  represent  them  in  foreign 
offices.  Never  has  there  been  such  a  demand  for  men  or 
for  information  regarding  overseas  trade  as  since  the  Euro- 
pean war,  never  so  many  questions  asked  relative  to  oppor- 
tunities abroad.  Men  come  to  our  foreign  trade  houses 
from  schools,  from  the  professions,  doctors,  lawyers, 
preachers,  writers,  and  even  women,  asking  for  places  in 
this  new  activity  that  reaches  around  the  world. 

There  is  evident  reason  for  the  belief  of  these  men,  in 
our  country's  opportunity  in  trade  overseas^  for  recent 
statistics  gathered  by  the  Department  of  Commerce  at 
Washington  show  that,  while  before  the  war  the  United 
States  ranked  second  to  the  United  Kingdom  as  an  export 

51 


52  FOREIGN  TRADE  MARKETS  AND  METHODS 

nation,  wc  had  in  1920  the  largest  foreign  commerce  of 
any  nation  in  the  world.  \Vith  our  expanding  resources 
and  with  the  new  alertness  on  the  part  of  our  business 
men  relative  to  overseas  trade  in  general,  there  is  no  rejuson 
why  foreign  commerce  as  a  vocation  should  not  open  one 
of  the  most  fascinating  and  lucrative  fields  for  American 
youth. 

An  instance  of  this  natural  sweep  of  opportunity  is 
given  in  the  fact  that  we  in  the  United  States  have  over 
one-half  the  known  coal  of  the  world  and  two-thirds  the 
world's  cotton.  While  we  have  only  7  per  cent  of  the 
world's  land  and  only  8  i)er  cent  of  the  world's  poimlation, 
our  production  of  the  world's  supply  of  basic  raw  materials 
and  grains  is  50  per  cent.  We  produce  approximately  25 
per  cent  of  the  world's  wheat,  40  per  cent  of  the  world's 
lead,  50  per  cent  of  the  world's  zinc,  50  per  cent  of  the 
world's  coal,  60  per  cent  of  the  world's  aluminum,  60  per 
cent  of  the  world's  copper,  65  per  cent  of  the  world's  cot- 
ton, 65  i)cr  cent  of  the  world's  oil  and  75  per  cent  of  tho 
world's  com. 

Since  we  are  unable  to  coasume  at  home  the  total  of 
these  vast  products,  export  trade  is  becoming  a  necessity 
for  us  and  if  we  have  the  men  proporly  trained  to  enter 
this  open  door  we  ought  to  be  able  to  do  the  manufactur- 
ing and  carrying  of  the  foreign  commerce  for  fully  one- 
half  the  world ;  but  we  must  have  men  trained  to  operate 
our  new  ships  and  an  ever-increasing  flow  of  workers  for 
shipping  offices  and  shipyards,  or  else  our  American 
Merchant  Marine  becomes  an  economic  danger  rather 
than  a  great  promise.  We  also  must  have  men  who  will 
accept  the  opportunity  for  preparation  in  foreign  banking 
and  merchandising,  if  we  expect  to  go  out  with  success 
along  the  highways  of  world  commerce. 

For,  after  all,  this  game  of  trade  with  other  nations  is 
just  beginning  for  us.  It  is  to  us  largely  a  new  game,  and 
it  is  highly  specialized.  As  a  nation,  we  do  not  yet  know 
the  rules.  Our  competitors  are  seasoned  traders  with 
scores  of  years  of  experience  behind  them,  and  what  is 


TRAINING  FOR  FOREIGN  COMMERCE  63 

more  vital,  they  feel  the  urge  of  necessity  for  seeking  trade 
outside  their  own  borders  if  they  are  to  survive  in  the 
family  of  nations.  There  is  no  doubt  that  we,  as  a  people, 
have  the  imagination,  the  energy,  and  the  practical  genius 
to  enter  into  this  competitive  struggle  for  world  markets, 
but,  unless  we  give  attention  to  our  training,  we  shall  come 
off  as  badly  as  many  an  upstart  trading  house  that  be- 
gan to  seek  markets  during  the  war,  all  unprepared, 
and  even  yet  is  wondering  why  it  lost  its  money  and  its 
time. 

The  Duke  of  Wellington  said  that  the  battles  of  England 
were  won  on  the  playing  ficldis  of  Eton  and  Rugby  where 
English  youth  were  trained  to  play  the  game  of  life  and 
to  play  it  fair.  Likewise,  foreign  trade,  partially  at  least, 
is  won  at  home  before  the  men  go  forth.  It  is  here  that 
they  must  imbibe  the  elements  of  success  which  will  enable 
them  to  "fall  on  their  feet"  amidst  alien  peoples 
and  also  to  hold  their  own  against  the  trade  veterans 
who  have  weathered  many  a  business  battle  on  foreign 
shores. 

First  of  all,  let  no  one  deceive  himself  into  thinking 
that  the  characteristics  that  win  in  foreign  trade  are  a  kind 
of  mysterious  sleight-of-hand,  something  that  goes  along 
^vith  learning  Spanish  or  Chinese.  Foreign  trade  is  not 
an  exercise  in  legerdemain.  The  fundamentals  are  the 
same  traits  that  make  a  man  succeed  at  home.  It  is  the 
spirit  of  the  man  that  wins  quite  as  much  as  his  knowl- 
edge of  method.  It  is  the  quality  of  the  man  quite  as  much 
as  the  knowledge  of  export  quotations  that  determine  the 
rjsult. 

One  of  the  first  necessities  for  a  successful  foreign  trader 
is  a  wide  vision.  It  is  easier  to  do  a  big  thing  than  a  small 
thing,  and  the  first  essential  is  the  man  who  can  visualize 
an  enterprise  of  great  proportion.  John  Ruskin  once 
said: 

The  greatest  thing  that  any  man  can  do  in  this  world  is  to 
see  something  and  then  go  and  tell  his  vision  in  a  plain  way. 


64         FOREIGN  TRADE  MARIvETS  AND  METHODS 

The  foreign  trade  business  has  no  fixed  horizon.  It  is 
written  upon  the  skies  as  upon  the  seas;  the  airplanes 
and  the  ships  are  to  be  the  carriers  of  food  as  well  as 
of  products  in  the  next  generation  to  the  earth's  farthest 
lands. 

I  know  an  American  manufacturer  who  was  able  to 
visualize  practically  all  the  inhabitants  of  Asia  using  his 
carriages  and  rickshaws  that  he  would  make  in  a  town  in 
New  Jersey.  As  a  result  to-day  the  American  traveler  rides 
in  these  American  conveyances  in  nearly  every  country  in 
the  Orient. 

World  trade  is  not  for  the  narrow  visioned.  It  means  a 
map  of  the  world  on  one's  desk.  Beginnings  may  be  small 
and  slow,  but  the  foundations  must  be  laid,  both  in  the 
mind  of  the  manufacturer  and  his  agents  whom  he  inspires, 
for  a  structure  of  business  world-wide  in  its  reach. 

Let  a  man  feel  that  he  is  bracing  himself  against  a  world 
task ;  let  him  lay  patiently  and  deeply  the  groundwork  of 
his  training  and  confidence,  for  it  is  here  trading  com- 
panies win  or  lose  even  at  the  beginning.  The  first  prin- 
ciple of  success  is  a  world  eyesight ;  a  short  vision  is  suicide 
in  foreign  commerce. 

There  is,  furthermore,  no  realm  of  business  in  which 
pei*severance  and  dog'^ed  determination,  even  despite  many 
failures  and  losses,  are  more  essential  than  in  foreign  com- 
merce. The  trader  must  add  to  a  big  vision,  resolution. 
Nothing  short  of  a  cast-iron  purpose  will  weather  the 
vicissitudes  consequent  upon  getting  on  with  a  new  lan- 
guage, new  customs,  strange  peoples,  homesickness,  unusual 
temptations  and  the  onslaughts  of  his  compctitoi's.  A  man 
may  be  trained  to  a  nicety  in  the  regulation  methods  of 
trade,  language,  shipping  rules,  invoices  and  selling  argu- 
ments, but,  if  he  cannot  brook  failure  and  discouragement, 
let  him  not  enter  here!  The  need  is  not  merely  for  able 
men,  but  it  is  always  for  determined  men,  men  who  are 
not  afraid  to  work  and  who  will  "never  say  die." 

Mr.  Edison  was  asked  once  to  define  genius  and  he 
answered,  "Two  per  cent  inspiration  and  ninety-eight  per 


TRAINING  FOR  FOREIGN  COMMERCE  53 

cent  perspiration."  "It  is  dogged  as  does  it,"  said  Charles 
Darwin. 

"VVe  met  a  man,  a  southern  youth,  in  a  flourishing  town 
of  South  Brazil.  He  was  the  only  American  in  the  place. 
He  had  been  trained  in  railroading  in  a  good  school  of 
experience  in  the  "States"  and  he  knew  how  to  manage  an 
American  railroad.  In  Brazil,  however,  with  indifferent 
labor,  with  a  strange  climate,  amid  people  whose  manners 
and  methods  and  laws  were  new  to  him  and  offered  many 
obstructions,  the  railroad  game  took  on  different  propor- 
tions. I  watched  him  working  at  the  complicated  task  in 
that  section,  of  securing  proper  ears  and  trains  to  get  a 
large  shipment  of  Parana  lumber  from  a  sawmill  on  the 
edge  of  the  jungle  down  to  the  seacoast.  Being  impressed 
with  his  efforts,  I  asked  him  what  trait  was  most  essential 
for  a  young  American  to  pcssess  who  went  railroading  in 
South  America.  He  thought  a  moment  and  then  answered : 
"The  grit  to  hang  on."  As  I  followed  that  man  for  several 
weeks  through  the  forests  and  over  the  newly  laid  railway 
trails  of  Southern  Brazil,  watched  him  adapt  himself  to 
foreign  labor  that  included  Hollanders,  Portuguese, 
Hungarians,  Swedes,  Italians  and  Brazilians,  always  find- 
ing him  personally  on  the  job  both  night  and  day,  restor- 
ing washouts  on  his  roads,  devising  new  lines,  haggling 
with  native  officials  for  concessions,  drinking  mate  with  his 
laboring  men  in  the  jungle,  foregoing  comforts  and  spend- 
ing wakeful  nights  figuring  his  way  through  difficult  and 
well-nigh  insurmountable  problems,  I  became  convinced 
that  his  key  to  the  things  that  succeed  in  foreign  lands 
was  worth  considering.  I  thought  of  Napoleon's  famous 
dictum  to  his  soldiers  in  his  Alpine  campaign  when  ho 
said,  "There  are  no  Alps!"  and  his  other  trenchant  phrase, 
"Difficulties  are  just  things  to  be  overcome." 

A  foreign  trade  pioneer  must  be  a  fighter  in  spirit. 
The  foreign  field  is  no  place  for  the  indolent,  the  spender 
or  the  idler.  He  must  train  for  conflict  and  not  for  an 
easy  job. 

It  is  this  fighting  opportunity  which  helps  to  make  the 


56         FOREIGN  TRADE  MARKETS  AND  METHODS 

field  attractive  to  the  Amoriean  who  is  not  accustomed  to 
stop  at  hindrances  when  his  ambition  is  fired.  The  Yankee 
love  of  enterprise,  coupled  with  business  daring,  is  usually 
successful. 

Apart  from  these  general  essentials  which  we  are  too 
likely  to  take  for  granted  and  omit  in  our  training  plans, 
there  are  other  more  concrete  but  none  the  less  important 
elements  in  which  we  must  train  men  for  foreign  commerce. 
These  men  must  be  in  a  position  to  know  where  they  can 
get  authoritative  answers  to  such  questions  as  the  follow- 
ing: 

Wliat  arc  the  conditions  in  foreign  markets  for  particular 
products  7 

Where  can  1  get  details  of  customs  duties  in  foreign  coun- 
tries? 

Who  can  tell  me  relative  to  the  regulations  as  to  commercial 
travelers,  taxes  imposed  upon  them,  etc.? 

Where  can  I  get  such  details  for  foreign  countries  as  advertis- 
ing rates  and  the  credit  standing  of  i)rospective  foreign  cus- 
tomers'? 

What  are  the  best  books  on  {>acking,  consular  requisites, 
standard  weight  and  measure,  patent  and  trademark  laws? 

Where  can  I  get  ui)-to-date  lists  of  foreign  buyers  for  my 
goods  ? 

Where  can  the  information  bo  found  conceraing  shipping  con- 
ditions, forwarding  goods  and  financing  my  shipments? 

How  can  I  learn  about  foreign  contracts  and  the  particular 
needs  of  the  dealers  who  handle  my  products  in  other  lands? 

What  about  marine  insurance? 

Is  there  an  authoritative  bureau  for  the  translation  of  foreign 
coiTespondence  ? 

What  are  some  of  the  most  worth  while  periodicals  relative 
to  foreign  shipping  and  trade? 

The  man  who  is  to  become  a  specialist  in  his  field  must 
know  something  at  least  of  all  the  above  subjects,  for 
specialists  in  foreign  trade  require  something  more  than  the 
definition  which  one  man  has  given  of  a  specialist — "a 
specialist  is  a  crank  on  the  thing  in  which  you  are  not 


TRAINING  FOR  FOREIGN  COMMERCE  57 

interested."   He  must  have  a  general  trade  education  to  be 
sure  of  the  highest  success. 

Among  the  agencies  which  are  devoting  considerable 
time,  attention  and  money  to  the  answering  of  the  above 
questions  is  the  Bureau  of  Foreign  and  Domestic  Com- 
merce of  the  United  States  Department  of  Commerce  in 
Washington,  D.  C.     This  bureau  employs  scores  of  men 
constantly  to  make  digests  of  consular  reports,  together 
with  the  findings  of  the  travelmg  trade  advisers  and  com- 
mercial attaches  of  the  United  States,  as  well  as  gathering 
trade  information  from  many  other  sources.     In  connec- 
tion with  this  bureau  there  are  specialists  connected  with 
such  matters  as  foreign  tariffs,  foreign  customs  rates,  com- 
mercial treaties,  trade-marks,  patent  laws,  and  almost  every 
kind  of  service  connected  with  exporting,  importing  and 
shipping.     Their  information  has  brought  millions  of  dol- 
lars of  trade  to  the  American  manufacturer  and  a  letter 
to  this  bureau  concerning  any  of  the  above  questions  will 
bring  the  latest  information  for  the  price  of  a  pamphlet, 
and  often  free  of  charge.     The  Exporters'  Index  of  this 
bureau  contains  lists  of  17,000  firms  in  the  United  States 
known  to  be  interested  in   exporting.     The  bureau  has 
permanent  offices  in  a  number  of  the  large  cities  in  which 
lists  of  foreign  dealers  may  be  found,  which  lists  are  con- 
tinually in  the  process  of  revision.     We  have  found  the 
members  of  the  Bureau  of  Foreign  and  Domestic  Commerce 
extremely  courteous  in  promptly  answering  requests  for 
information  and  the  fact  that  the  United  States  Govern- 
ment is  behind  the  bureau  and  is  expending  a  large  amount 
of  money  for  its  extensive  operations  and  services  helps  to 
make   authoritative   the   information.     This   bureau   also 
emphasizes  the  fact  that  the  United  States  has  come  into 
the  foreign  trade  field  to  stay.    For  a  small  sum  the  weekly 
Commerce  Reports  of  this  organization,  which  give  a  sweep 
of  the  world's  trade,  are  sent  to  any  one  who  is  interested. 
Other  important  information  for  training  purposes  may 
be  secured  from  the  reports  of  the  National  Foreign  Trade 
Council.     These  may  be  secured  by  writing  to  Mr.  0.  K, 


58         FOREIGN  TRADE  MARIvETS  AND  METHODS 

Davis,  secretary,  India  House,  1  Hanover  Square,  New 
York  City.  This  council  is  composed  of  leading  men 
engaged  in  foreign  trade  and  shipping  and  its  reports 
cover  virtually  every  phase  of  world-wide  commerce. 

Books  on  business,  such  as  those  published  by  Appleton 
and  McGraw-Hill,  trade  papers  such  as  Dun's  Review,  The 
Iron  Age,  The  American  Exporter,  The  World's  Markets, 
and  Export  Trade  will  be  found  of  help  in  such  training, 
for  these  take  up  special  branches  of  foreign  enterprise  and 
are  edited  by  specialists,  and  the  contributors  are  men  who 
have  devoted  years  of  their  lives  in  practical  and  experi- 
mental touch  with  their  specialties  in  foreign  lands. 

The  Pan-American  Union  issues  literature  upon  all  Latin 
American  countries  which  has  been  of  very  great  assistance 
in  showing  the  political  as  well  as  the  commercial  condi- 
tion of  these  republics  and  outlining  the  opportunities  for 
commerce  with  the  United  States.  This  literature  may  be 
had  by  applying  to  the  Pan-American  Union,  Washing- 
ton, D.  C.  We  also  recommend  the  books  pul^lished  by 
Isaac  Pitman  &  Sons,  2  West  45th  Street,  New  York  City, 
such  as  the  Pit7nan  Commercial  Encyclopedia  and  Diction- 
ary of  Business  (in  four  volumes)  ;  the  Exporter's  Encyclo- 
pedia, and  the  publication  of  the  Gresham  Publishing  Com- 
pany, London  (British  compilation),  Modern  Business 
Practice   (in  eight  volumes). 

There  are  also  many  sources  of  information  available 
to  the  foreign  trade  student  in  the  United  States,  such  as 
the  reports  of  the  American  Chamber  of  Commerce,  the 
wide  information  gathered  by  the  Philadelphia  Commercial 
Museum  and  the  more  or  less  regular  statements  and  bul- 
letins of  information  issued  by  such  organizations  as  the 
National  City  Bank,  Guaranty  Trust  Company,  and  W.  R. 
Grace  &  Company.  In  nearly  all  of  the  large  cities  there 
are  Chambers  of  Commerce  or  Boards  of  Trade  whose 
secretaries  are  able  to  give  information  through  their 
foreign  trade  departments  or  industrial  bureaus.  In  some 
cases,  as  the  Merchants'  Association  in  New  York,  an  active 
foreign  trade  information  service  publishes  this  material 


TRAINING  FOR  FOREIGN  COMMERCE  59 

in  weekly  bulletins,  and  while  local  matters  are  included, 
foreign  trade  problems  and  opportunities  are  not  neglected. 
There  are  also  American  Chambers  of  Commerce  abroad 
from  which  important  information  may  be  gained.  In 
Paris,  Berlin,  Constantinople,  Naples,  Barcelona,  Rio  de 
Janeiro,  Buenos  Aires  and  Shanghai,  these  American 
Chambers  of  Commerce  have  been  of  great  service  not  only 
in  producing  a  better  trade  understanding,  but  in  assist- 
ing American  manufacturers  and  business  men  with  par- 
ticular information.  The  Federal  Board  for  Vocational 
Education,  at  Washington,  has  outlined  courses  of  reading 
in  foreign  trade  which  it  will  send  to  any  one  interested. 

It  must  be  remembered  also  that  our  American  Consuls, 
located  now  in  virtually  every  great  city  in  foreign  lands, 
will  be  glad  to  answer  questions  and  secure  information 
when  these  questions  state  definitely  what  is  desired. 

It  is  probably  true  that  the  majority  of  successful 
Americans  who  have  gone  to  South  America  and  built  up 
trade  for  their  American  houses  have  not  been  college  men. 
Other  things  being  equal,  nevertheless,  the  man  who  has  a 
background  of  collegiate  knowledge  and  mental  discipline 
is  more  likely  to  succeed  with  the  type  of  mind  found  in 
South  America  than  the  man  who  is  ''all  business,"  with 
no  ability  to  lighten  his  conversation  with  thoughts  in  the 
realm  of  what  is  known  as  ''general  knowledge."  I 
think  of  a  young  man  who  devoted  much  of  his  thought 
in  coUege  to  architectural  study,  who  claims  that  this  one 
department  of  knowledge  concerning  w^hich  he  Imew  some- 
thing definite,  has  helped  him  more  than  any  other  one 
qualification  in  securing  a  foothold  in  one  of  the  large 
South  American  cities.  Entrances  to  business  often  come 
through  avenues  in  which  the  arts  play  an  important  part. 
The  South  Americans  love  music,  literature  and  painting 
and  among  them  there  are  most  excellent  architects,  musi- 
cians, literary  people  and  artists.  They  like  to  talk  upon 
these  subjects  and  the  educated  man  who  interests  them 
and  is  likable,  gains  a  hold  that  naturally  reflects  profitably 
upon  his  business  success. 


60         FOREIGN  TRADE  MARKETS  AND  METHODS 

A  qualification  undeniably  important  for  men,  young  or 
old,  in  going  abroad  is  that  which  includes  habits  of  life 
sufficiently  well  grounded  to  insure  straightforward  and 
upright  living  in  a  foreign  land.  While  it  is  true  that 
most  business  houses  rightfully  demand  practical  results 
from  their  employees,  both  at  home  and  abroad,  and  do  not 
inquire  too  strictly  into  a  man's  personal  habits,  it  is 
important  in  choosing  men  for  foreign  positions  to  be 
reasonably  sure  that  the  men  are  not  going  to  make  ship- 
wrecks of  themselves  and  their  company's  interest  by  los- 
ing their  heads,  simply  because  they  are  far  away  from 
home  and  placed  among  peoj^le  whose  points  of  view,  both 
moral  and  social,  are  often  different  from  our  own. 

Furthermore,  the  American  business  man  is  often  located 
in  more  or  less  lonely  posts  and  for  a  time,  at  least,  may  be 
deprived  of  the  society  and  amusement  to  which  he  has 
been  accustomed  at  home.  Therefore,  the  man  with  a 
trained  mind,  who  has  some  mental  resources  of  his  own, 
who  can  endure  spending  an  evening  alone  with  a  book  or 
with  a  friend,  and  who  is  not  dependent  upon  the  stimula- 
tions of  Broadw^ay  or  the  like,  is  much  more  likely  to  suc- 
ceed abroad  than  the  one  who  depends  upon  external 
environment  rather  than  upon  his  own  inner  resources  for 
satisfaction. 

There  is  no  doubt  that  by  vocational  study  a  man  must 
greatly  advance  in  the  province  of  foreign  trade.  To  this 
end,  we  quote  a  paragraph  taken  from  a  very  important 
and  suggestive  pamphlet  issued  by  the  Department  of 
Commerce  under  the  title  of  "Training  for  Foreign  Trade'* 
which  can  be  secured  from  that  body  by  referring  to  Mis- 
cellaneous Series  97. 

For  argument,  we  may  say  that  a  young  man  enters  an  export 
ofiBce  at  16,  is  a  salesman  at  2Q,  and  a  manager  at  36.  It  is 
usually  a  20-year  pull  to  the  position  of  manager.  Yet  it  is 
possible  to  cut  down  the  20  years  by  substituting  vocational  study 
for  some  of  the  slowly  acquired  experience.  For  example,  by 
studj-ing  until  19  or  20  the  managerial  rank  may  be  reached  at 
30 — a  gain  of  6  years  in  a  young  man's  life,  in  additioa  to 


TRAINING  FOR  FOREIGN  COMMERCE  61 

greatly  increased  efficiency  in  the  work  done  along  the  line  of 
progression.  The  young  man  on  the  job  may  likewise  reduce 
his  terms  of  apprenticeship  by  supplementing  actual  working 
experience  with  systematic  vocational  study. 

Finally,  we  would  urge  the  increasing  use  of  our  schools 
(night  schools,  commercial  and  technical  schools,  and  col- 
leges). Our  business  houses,  which  in  many  cases  have 
already  begun  to  train  their  men  in  classes  for  work 
abroad,  also  our  press  and  our  trade  periodicals  all  point 
to  the  need  of  getting  thoroughly  ready  for  American 
foreign  commerce.  Trained  and  capable  men  are  required 
for  foreign  branch  managers,  for  salesmen,  for  office 
workers,  as  well  as  for  equipping  our  new  merchant  marine. 
No  word  is  more  strategic  or  vital  in  the  realm  of  our  over- 
seas activity  than  the  word  "preparation." 

Practical  Methods  in  Use  in  Business  Firms  for  Training 
for  Foreign  Commeroe. — In  order  to  be  able  to  present 
for  suggestion  and  direction  the  concrete  methods  now 
employed  by  some  of  the  largest  American  firms,  and 
educational  institutions  to  fit  men  for  foreign  trade  posi- 
tions, we  sent  the  following  questions  to  a  carefully  selected 
list  of  business  houses  and  schools: 

1.  What  agencies  do  you  employ  for  training  your  employees 
for  work  in  foreign  countries?  (Kindly  describe  any  agen- 
cies or  methods  employed,  such  as  courses  of  study,  publi- 
cations, welfare  work  abroad,  libraries,  reading  courses, 
etc.) 

2.  What  books  or  literature  have  you  found  most  helpful  for 
the  purpose  of  giving  your  men  general  or  specific  knowl- 
edge concerning  your  trade  abroad? 

3.  Does  your  Company  meet  in  whole  or  in  part  the  expenses 
of  employees  who  are  studying  outside  to  better  prepare 
themselves  for  foreign  service  in  your  firm? 

4.  Is  there  any  particular  class  of  men  from  which  you  recruit 
your  force  of  employees? 

5.  What  in  your  judgment  is  the  comparative  value  of  college 
men  for  foreign  trade  service  in  comparison  to  men  not 


62         FOREIGN  TRADE  MARKETS  AND  METHODS 

having  a  college  training  but  who  have  had  considerable 
experience  in  the  firm's  business? 
6.   What  do  you  consider  some  of  the  most  vital  means  for 
fitting  men  to  take  responsible  trade  positions  abroad? 

Among  the  answers  received  we  quote  the  following, 
which  we  believe  will  be  read  with,  much  interest  and  profit 
by  all  those  now  training  their  workers,  or  by  those  firms 
wishing  to  inaugurate  systems  of  training  to  fit  their 
employees  for  better  service  overseas: 

The  Standard  Oil  Company,  New  York  City. 

Our  policy  is  to  confine  our  training  to  men  especially  qualified 
to  take  up  this  particular  work.  We,  therefore,  eliminate  poor 
material  before  the  class  starts  and  are  thus  able  to  concentrate 
the  training  on  a  few  specially  qualified  men.  These  men  in  the 
past  have  been  selected  from  the  various  universities  and  from 
our  own  organization.  We  are  striving  more  and  more  to  find 
among  our  own  employees  any  who  are  particularly  suited  to 
take  up  this  training. 

Our  classes  are  composed  of  about  twelve  men,  six  or  eiglit 
of  whom  are  given  the  foreign  service  training.  In  the  past  these 
classes  have  been  started  every  ten  weeks,  covering  a  period  of 
twenty-six  weeks.  We  aim  chiefly  to  teach  the  men  the  details 
of  our  business,  the  manufacture  of  our  products  and  the  organ- 
ization and  function  of  the  different  departments  in  our  Com- 
pany, in  particular  the  foreign  departments  operating  in  the 
locality  to  which  each  man  will  be  sent. 

The  course  consists  of  ten  weeks  of  practical  experience  in 
our  refineries,  where,  under  the  supervision  of  an  instructor,  the 
men  learn  the  manufacture  of  our  products.  They  are  then 
transferred  to  one  of  our  marketing  fields  for  ten  weeks,  where, 
also  under  an  instructor,  they  learn  how  we  market  our  product 
and  how  our  sub-stations  and  general  offices  are  managed.  On 
the  completion  of  this  work  they  are  transferred  to  the  New  York 
offices  for  six  weeks,  where  in  the  various  foreign  departments 
they  finish  the  training.  During  these  twenty-six  weeks  they  are 
trained  by  actual  experience  rather  than  by  observation  of  the 
work. 

In  addition  to  this  the  men  are  given  a  course  in  the  language 
used  in  the  country  to  which  they  will  be  sent.    Each  week  an 


TRAINING  FOR  FOREIGN  COMMERCE  63 

officer  of  the  Company  or  a  Department  Head  gives  a  lecture 
on  some  phase  of  the  Company's  business,  so  that  men  may  get 
a  broader  experience  of  the  work  they  are  to  undertake. 

A  library  of  technical  books  is  furnished  to  assist  them  in  their 
refinery  work.  Also  from  time  to  time,  depending  on  the  par- 
ticular work  to  which  a  man  is  assigned,  other  books  are  recom- 
mended. 

During  the  period  of  training  the  men  are  paid  twenty-three 
dollars  a  week,  in  addition  to  any  expenses  incurred  in  the  per- 
formance of  work  assigned. 

We  do  not  restrict  our  work  to  college  graduates,  as  we  believe 
this  is  unnecessary,  but  we  do  stipulate  that  a  man  shall  have 
had  the  equivalent  in  business  experience.  As  a  matter  of  fact 
we  send  a  great  many  college  men  who  apply  to  us  for  work 
out  to  one  of  our  plants  to  get  that  practical  experience  which 
we  deem  to  be  of  vital  importance,  not  only  because  of  what  he 
may  learn  but  also  as  a  further  test  in  judging  a  man. 

W.  R.  Grace  &  Co.,  New  York  City. 

A  matter  of  vital  importance  to  such  organizations  as  the 
Grace  Company  consists  in  the  conduct  of  educational  classes, 
intended  both  to  bring  students  together  in  close  personal  con- 
tact and  work  to  a  common  end  and  to  fit  them  for  particular 
fields  of  activity.  In  the  home  office  of  W.  R.  Grace  &  Co., 
these  classes  meet  on  Tuesdays  and  Thursdays  from  five  to  six: 
forty-five  on  the  following  subjects :  Elementary  Spanish,  Inter- 
mediate Spanish,  Advanced  Spanish,  Commercial  Geography, 
Talks  on  Accounts,  Typewriting  Course  (given  in  small  groups 
of  3,  4  and  5  persons). 

In  addition  to  these  regular  courses,  special  training  is  given 
for  particular  students  and  a  series  of  lectures  running  through 
the  year,  upon  subjects  of  most  vital  moment  in  the  activities 
of  the  firm.  Some  of  these  lectures  are  given  by  heads  of  depart- 
ments or  specialists  in  the  organization  itself,  while  occasionally 
outside  lecturers  are  secured. 

A  further  assistance  to  the  mental  training  of  individuals  is 
afforded  by  a  carefully  chosen  library,  a  portion  of  which  is 
filled  with  books  for  circulation  and  the  other  portion  with  refer- 
ence books.  Hundreds  of  members  of  the  firm,  at  the  home 
office,  borrow  these  books  every  month  for  two  weeks'  reading, 
while  the  editorial  department  is  constantly  in  demand  by  various 


64         FOREIGN  TRADE  MARKETS  AND  METHODS 

members  of  the  house  who  wish  to  consult  maps,  dictionaries, 
trade  encyclopedias  and  various  works  in  different  languages, 
as  these  relate  to  their  several  departments. 

The  larger  firms  and  corporations  of  to-day,  in  many  cases, 
are  composed  of  departments,  each  department  forming  almost 
a  special  business  in  itself.  The  tendency  for  specialization  often 
works  against  cooperative  unity.  It  is  difficult  sometimes  for 
members  in  one  department  to  have  even  a  general  knowledge 
of  the  varied  activities  of  a  large  firm,  thereby  suffering  a  severe 
handicap  relative  to  their  own  particular  specialty.  The  monthly 
house-organ  or  corporation  magazine  furnishes  a  bond  of  union 
between  employees  often  scattered  throughout  the  country  or  the 
world.  In  these  magazines,  we  find  the  personal  element  forms 
one  of  the  most  important  features.  The  narration  of  personal 
events  concerning  the  officers  and  employees  of  the  firm,  the 
publishing  of  pictures  of  persons  in  groups  or  individually,  the 
just  personal  mention  of  long  service  or  particular  examples  of 
efiBeiency,  are  all  matters  of  great  advantage  in  cementing  the 
work  of  the  house  and  in  developing  the  sense  of  personal 
responsibility  and  privilege  on  the  part  of  the  members.  No 
matter  how  seemingly  unimportant  the  work  of  an  employee,  it 
is  always  vital  to  his  best  output  to  emphasize,  in  his  mind,  the 
necessity  of  the  highest  grade  of  work  on  his  part  if  the  business 
is  to  succeed.  It  is  this  catering  to  the  great  value  of  the 
individual  that  has  made  many  a  firm  succeed  beyond  its  com- 
petitors. 

The  social  club  and,  in  foreign  countries,  the  club  or  mess 
where  employees  live  together,  are  means  which  have  been  found 
useful  in  developing  and  strengthening  the  personal  element  in 
the  Grace  Organization.  The  Grace  Club  at  the  home  office  con- 
sists of  500  members  and  during  the  year  it  is  exceedingly  active 
arranging  dances,  dinners  and  outings  during  the  Spring,  Sum- 
mer and  Autumn  months,  as  well  as  organizing  athletic  teams 
for  baseball,  football,  tennis  and  even  a  riding  club.  At  these 
social  gatherings,  the  directors  of  the  firm  are  usually  present 
and  frequently  in  brief  speeches  give  emphasis  to  the  human 
side  of  business.  The  mixing  together  for  personal  acquaintance, 
however,  is  one  of  the  chief  benefits  of  such  gatherings. 

Among  other  indications  of  attention  to  the  welfare  of  the 
employees,  the  company  has'  a  physician  at  the  New  York 
Office.  With  his  assistants,  including  a  trained  nurse,  he  cares 
for  the  health  of  the  600  or  more  employees  there.  Any  employee 


TRAINING  FOR  FOREIGN  COMMERCE  65 

of  the  firm  has  the  privilege  of  consulting  the  physician  and 
securing  medicine  and  treatment  free  of  charge — a  privilege 
which  is  greatly  appreciated  and  which  is  intended  also  to  increase 
greatly  the  sense  of  appreciation,  on  the  part  of  the  employees, 
relative  to  the  attention  of  the  house  to  their  personal  welfare. 

Above  and  beyond  all  of  these  practical  and  far-reaching  agen- 
cies, in  recognition  of  the  fact  that  the  men  and  women  of  our 
business  houses  are  the  vital  factors  in  production,  a  successful 
house  will  lose  no  opportunity  to  develop,  among  its  employees, 
the  house  esprit  de  corps. 

In  my  contact  with  this  house  in  various  parts  of  South 
America,  I  have  been  impressed  with  what  is  called  the  "Grace 
spirit."  The  attempt  is  made,  successfully  for  the  most  part,  to 
show  the  various  agents  and  men  connected  with  the  company 
that  the  house  represents  a  great  American  enterprise,  and  that 
each  representative  stands  for  something  more  than  a  mere  busi- 
ness agent,  in  fact,  that  he  reflects  the  ideals  of  the  nation  behind 
him. 

I  was  much  interested  in  the  club  or  the  "mess,"  as  it  is  often 
called,  where  Grace  men  live  together  in  South  American  countries. 
A  house  is  rented  and  made  homelike  as  a  place  for  the  men 
without  families.  A  steward  and  treasurer  are  elected,  and  the 
house  is  equipped  with  reading  matter,  billiard  tables,  pianola 
and  other  conveniences  for  producing  a  homelike  atmosphere. 
Many  of  the  plants  are  situated  far  away  from  the  cities  and 
these  clubs  are  virtually  oases  in  far-away  sections  of  Peru, 
Bolivia  and  Chile,  where  the  comforts  and  amenities  of  civiliza- 
tion have  not  yet  penetrated. 

In  the  great  nitrate  community  of  Chile,  for  instance,  there 
may  be  only  a  small  circle  of  Americans  representing  the  officers, 
possibly  half  a  dozen  or  nine  men  who  are  responsible  for  run- 
ning an  enormous  plant.  Outside  is  the  camp  for  workmen. 
The  evenings  for  Americans  in  such  localities  are  likely  to  be  a 
nightmare  of  loneliness.  There  is  lack  of  companionship  and 
social  opportunities  such  as  those  to  which  the  men  have  been 
accustomed  at  home. 

The  company  has  been  quick  to  appreciate  this  fact  and  to 
provide  not  only  comfortable  quarters,  but  to  establish  customs 
intended  to  give  the  officers  a  life  by  themselves,  and  to  prevent 
such  unfortunate  mixtures  with  the  camp  community  as  would 
disrupt  discipline  and  morals.  I  found  it  the  custom  for  every 
one  of  the  official  staff  from  the  manager  down^  after  work 


66         FOREIGN  TRADE  MARIOITS  AND  METHODS 

was  over,  to  don  his  dinner  jacket  preparatory  for  dinner, 
while  afterwards,  opportunities  were  offered  for  games  and 
amusements  in  the  club.  As  one  man  put  it,  'None  of  us  are 
inclined  to  find  our  way  down  to  the  camps  in  a  dinner  jacket. 
When  you  put  on  the  dress  of  a  gentleman  you  are  quite  likely  to 
act  like  one." 

On  the  big  sugar  estates  at  Cartavio,  in  Peru,  a  church  has 
been  founded,  also  a  schoolhouse,  a  hospital  and  a  moving  picture 
theater.  The  influence  of  these  organizations  has  been  manifested 
directly  upon  the  community  of  workmen.  Formerly  it  was 
customary  during  the  holidays  for  "every  one  to  get  drunk  for  a 
week,"  according  to  the  statement  of  one  of  the  men.  One  of 
the  dealers  in  chicha,  the  Peruvian  national  drink,  stated  to  a 
manager  that,  as  a  result  of  the  church  and  theater  he  had  been 
obliged  to  go  out  of  business,  for  while  he  had  been  accustomed  to 
sell  ten  barrels  of  chicha  during  certain  holiday  periods,  it  was 
now  impossible  for  him  to  get  rid  of  more  than  one  barrel.  It 
has  further  resulted  that,  instead  of  several  days  of  shutdown  on 
account  of  the  dissipation  of  the  holidays,  there  is  rarely  more 
than  one  day  of  stoppage  on  the  estates  through  any  inability 
of  the  men  to  work  as  a  result  of  excessive  indulgence  in  drink. 
The  Grace  Institute  has  helped  in  making  these  isolated  planta- 
tions" and  estates  enjoyable  and  livable.  Last  year,  two  hundred 
presents  were  sent  down  to  this  particular  sugar  estate  at  Christ- 
mas time,  with  several  hundred  boxes  of  candy  and  other  gifts. 
Such  work,  as  one  man  said,  "has  put  Christmas  on  the  map  in 
this  community." 

American  Locomotive  Company^  Schenectady,  N.  T. 

The  men  selected  for  work  in  our  Foreign  Department  are 
usually  given  a  two  year  course  of  training  in  the  Engineering 
and  Manufacturing  Departments,  as  well  as  some  experience 
in  the  Foreign  Office  of  the  Company  in  New  York  City.  The 
shop  training  is  intended  to  familiarize  the  men  with  the  Com- 
pany's manufacturing  methods  and  standards  of  workmanship, 
while  the  engineering  experience  covers  the  important  elements 
in  locomotive  design  and  general  calculation  pertaining  to  the 
proportioning  of  locomotive  parts.  Literature  is  supplied  deal- 
ing with  the  locomotive  and  the  Company's  practice,  and  in  most 
eases  the  men  have  taken  special  evening  classes  relating  to 
locomotive  work. 

After  the  preliminary  training  and  service  in  the  home  oflOice 


TRAINING  FOR  FOREIGN  COMMERCE  67 

of  the  Foreign  Department,  these  men  are  placed  as  assistants 
in  the  sales  offices  in  foreign  countries  and  are  advanced  accord- 
ing to  the  ability  shown. 

Such  outside  study  as  is  required  to  prepare  men  for  work 
in  the  ToreigTi  Department  is  usually  borne  by  the  individual 
but  not  infrequently  the  expense  has  been  partly  carried  by  the 
Company, 

Recruits  are  preferred  from  among  college  graduates,  particu- 
larly those  who  have  taken  mechanical  engineering  courses.  It 
has  been  the  experience  of  our  Company  that  college  training  has 
a  decided  advantage  in  developing  a  man's  initiative  and  enabling 
him  to  analyze  conditions  relating  to  his  work  and  find  solutions 
for  the  problems  presented  to  an  extent  not  found  in  most  men 
who  have  not  had  college  training. 

We  believe  the  important  elements  in  the  training  for  foreign 
service  are: 

a.  A  thorough  knowledge  of  the  Company's  mechanical 
practice. 

b.  A  knowledge  of  the  essentials  of  its  engineering  practice. 

c.  The  handling  of  responsible  work  in  the  home  office  which 
would  give  an  appreciation  of  the  relation  of  work  in 
the  foreign  field  to  that  of  the  industry. 

d.  The  development  of  sound  judgment  in  business  relations. 

e.  A  knowledge  of  modern  salesmanship. 

f.  A  clear  understanding  of  the  characteristics  of  people 
to  be  met  with  in  the  foreign  field. 

The  Atlantic  Refining  Company,  Philadelphia,  Pa. 

1.  Q.  What  agencies  do  you  employ  for  training  employees  for 
work  in  foreign  countries? 

A.  Principally  practical  work,  coupled  with  current  discussions 
between  Departmental  Managers  and  myself,  or  my  assistants, 
in  addition  to  which  a  librai*y  is  at  the  disposal  of  the  members 
of  the  Export  Department. 

2.  Q.  What  books  have  you  found  useful  for  studying  trade 
abroad  ? 

A.  Practical  Exporting,  by  B.  Olney  Hough,  Exporter's 
Encyclopedia,  and  Trade  Magazines, 

3.  Q.  Does  your  Company  meet  in  whole  or  in  part  the  expenses 
of  employees  who  are  studying  outside  to  better  prepare  them- 
selves for  foreign  service  in  your  firm? 


68         FOREIGN  TRADE  MARKETS  AND  METHODS 

A.  Not  regularly,  although  it  has  been  done  at  times.  Some- 
times covered  by  an  adjustment  in  salary. 

4.  Q.  It  there  any  particular  class  of  men  from  which  you 
recruit  your  force  of  employees'? 

A.  Always  prefer  stenographers  with  a  High  School  education 
or  better,  although  individual  fitness  on  the  basis  of  exhaustive 
tests,  made  before  employment,  is  the  determining  factor.  Always 
prefer  men  with  export  experience,  and  preferably  a  knowledge 
of  languages. 

5.  Q.  What  in  your  judgment  is  the  comparative  value  of 
college  men  for  foreign  trade  service  in  comparison  to  men  not 
having  a  college  training  but  who  have  had  considerable  experi- 
ence in  the  firm's  business? 

A.  The  college  man's  value  lies  principally  in  his  better  mental 
training  to  grasp  and  apply  facts  and  generalize  experiences, 
although  in  case  of  a  choice  between  a  poorly  gifted  college  man 
and  a  talented  man  without  college  training,  the  latter  would  be 
taken  in  eveiy  case.  Experience  in  the  firm's  business  is  always 
a  valuable  factor,  but  not  as  determining  as  the  experience  in 
foreign  trade,  at  least  in  the  case  of  service  in  the  home  office. 
In  the  ease  of  foreign  service,  the  experience  in  our  line  of 
business  is  one  of  the  chief  factors,  but  only  secondary  to  pei'son- 
ality,  power  of  analysis,  and  general  superior  ability. 

6.  Q.  What  do  you  consider  some  of  the  most  vital  means  for 
fitting  men  to  take  responsible  trade  positions  abroad? 

A.  Provision  of  extensive  training  and  study  in  offering  tasks 
that  involve  responsibility,  self-reliance  and  quick  action,  to  test 
and  develop  initiative. 


American  Trading  Company^  2V^w  York  City. 

1.  Q.  What  institutions  do  you  consider  to  be  doing  effective 
work  in  training  students  for  our  foreign  trade? 

A.  W.  R.  Grace  &  Co.,  National  City  Bank,  American  Trading 
Co.,  Arkell  &  Douglass,  Guaranty  Trust  Co.,  Harvard,  New  York 
University  and  other  colleges  that  give  a  certain  amount  of 
theoretical  training. 

2.  Q.  What  books  have  you  found  most  useful  to  suggest  to 
schools  or  business  corporations  for  use  in  such  training? 

A.  Praotiml  Exporting  by  Hough,  Foreign  Exchange  Explained 
by  p]scher,  and  certain  Bank  pubbeations. 

3.  Q.  Could  you  suggest  certain  places  where  schools  or  col- 


TRAINING  FOR  FOREIGN  COMMERCE  69 

leges  are  cooperating  with  business  houses  in  training  men  for 
overseas  trade? 

A.  New  York  University,  Columbia  University,  Harvard 
University. 

4.  Q.  What  do  you  consider  to  be  the  most  vital  subjects  to  be 
taken  up  in  a  course  of  study  intended  to  fit  men  for  foreign 
trade  careers? 

A.  Routine  necessary  to  exporting  and  importing,  a  certain 
amount  of  export  finance,  concentration  and  common  sense,  gen- 
eral executive  ability,  the  power  to  handle  adequately  much  detail 
work  and  to  assume  responsibility. 

International  General  Electric  Company,  Schenectady, 
N.  Y. 

I  am  sorry  to  say  that  I  cannot  answer  your  questionnaire  in 
a  manner  which  will  be  very  helpful  to  you,  because  we  have 
not  yet  can'ied  our  work  far  enough.  Indeed,  we  are  just  starting 
it.  The  following  answers  will,  however,  inform  you  in  a  general 
way  what  we  have  in  mind. 

We  are  going  to  start  a  classroom  course  consisting  of  approxi- 
mately 40  lectures  with  correlated  reading,  covering  the  organiza- 
tion and  general  methods  of  our  company;  an  outline  of  the 
theory  of  business,  banking,  credit,  instruments  of  credit  and 
payment;  foreign  exchange;  foreign  customs  and  duties;  an  out- 
line of  the  theory  of  accounting;  a  study  of  markets;  national 
characteristics;  and  the  methods  of  exploiting  business,  govern- 
mental I'egulations  and  commercial  law  in  foreign  countries.  It 
is  needless  to  say  that  our  course  will  merely  touch  the  *high 
spots'  of  these  subjects,  but  we  hope  it  will  stimulate  interest 
and  lead  to  further  reading  and  study  by  the  men  who  take 
the  course.  A  library  will  be  created  so  that  suitable  books  and 
publications  may  be  available.  It  is  intended  to  have  practically 
all  of  pur  men  take  this  course,  and  the  course  will  undoubtedly 
be  modified  from  time  to  time  as  a  result  of  our  experience. 

We  have  started  classes  in  Spanish  and  French  already,  and 
these  are  fairly  popular.  Progress  is  not  very  rapid  in  the  time 
which  can  be  given,  but  I  hope  that  in  the  course  of  another 
two  years  the  advanced  classes  will  develop  into  groups  for  the 
study  of  the  countries  in  question  together  with  their  customs, 
methods  of  business,  national  temperaments,  etc. 

Some-  of  our  men  have  taken  courses  in  advanced  engineering 
or  in  business  training  from  institutions  that  were  available, 


70        FOREIGN  TRADE  MARKETS  AND  METHODS 

and  In  a  general  way  it  is  our  policy  to  bear  at  least  a  portion 
of  the  expense  of  such  courses  if  they  are  completed  successfully. 
Generally  the  company  is  willing  to  assume  50  per  cent  of  all 
the  necessary  fees. 

Practically  all  of  our  men  are  graduates  of  technical  schools 
and  in  addition  have  had  experience  in  our  testing  department. 

The  technical  nature  of  our  business  and  the  fact  that  our 
representatives  are  too  far  away  to  call  upon  factory  experts 
for  aid  but  must  be  able  to  discuss  with  customers  all  engineering 
details  of  the  business,  makes  it  almost  essential  that  we  employ 
men  with  technical  training,  only.  There  have  been  a  few  excep- 
tions, but  in  these  cases  the  men  have  picked  up  the  necessary 
information  during  many  years  of  work  in  our  ofiBces.  These 
few  men  began  as  clerks  and  owe  their  advancement  to  their  own 
exceptional  characteristics.  Probably  they  were  high  school 
graduates  when  they  came  to  us.  Without  denying  their  merits, 
I  think  the  general  feeling  is  that  four  years  spent  in  technical 
training  would  have  made  them  even  more  valuable  than  they  were 
or  are;  let  us"  say  at  ages  of  from  30  onward. 

A  man  to  go  abroad  must  first  of  all  be  acquainted  with  our 
methods,  policies  and  our  products  in  detail.  My  own  feeling 
is  that  in  addition  he  should  have  if  possible  actual  experience 
in  selling  and  in  merchandising  methods  and  he  ought  to  have  a 
good  idea  of  banking  methods,  corporation  finance,  accounting, 
budgeting  and  statistical  methods.  It  is  of  course,  impossible 
to  get  all  of  this  experience  in  the  case  of  most  men  and  it  is  to 
fiU  in  the  gaps  that  we  hope  that  our  course  mentioned  above 
wiU  be  of  some  value  as  well  as  in  giving  the  men  in  the  home 
office  a  more  comprehensive  interest  in  the  work  which  they 
conduct. 

Department  of  the  Interior,  Washington,  D.  C. 

In  answer  to  query  No.  3  of  your  questionnaire,  I  would  state 
that  I  have  found  cooperation  in  the  following  cities:  Boston, 
New  York,  Chicago,  Seattle,  Portland,  Los  Angeles,  San  Fran- 
cisco, St.  Louis,  Cincinnati,  New  Orleans,  Pittsburgh  and  Cleve- 
land. 

In  training  for  foreign  trade  it  was  the  earlier  practice,  as 
you  know,  of  our  higher  institutions  to  introduce  a  semester  course 
of  two  or  more  hours  on  this  subject  of  foreign  commerce.  In 
time  as  the  subject  became  more  clearly  understood  and  the 
demand  from  business  more  pressing,  the  course  in  foreign  trade 


TRAINING  FOR  FOREIGN  COMMERCE  71 

developed  into  what  might  be  called  a  major  in  this  subject. 
This  major  would  include  markets  and  sales,  banking  and  ex- 
change, ocean  transportation,  maritime  law,  marine  insurance, 
document  technique,  commercial  correspondence,  etc.  There  has 
been  little  or  no  demand  until  the  present  that  the  several  sub- 
jects oifered  be  better  coordinated  in  respect  to  sequence  with 
some  emphasis  upon  previous  training.  If  I  can  make  any 
special  contribution  at  this  writing  upon  the  subject  of  this 
inquiry,  I  would  state  that  in  my  judgment  the  time  has  come 
when  we  need  a  far  greater  measure  of  specialized  training  in 
fitting  men  to  engage  or  enter  upon  foreign  trade  courses.  This 
specialization  will  naturally  lead  to  a  greater  degree  of  group 
treatment  of  the  subjects  considered  most  essential  and  vital  for 
foreign  trade  preparation. 

College  of  William:  and  Mart,  WilUamshurff,  Va. 

New  York  University,  Boston  University,  Harvard  University 
and  University  of  Washington  (Seattle),  I  consider  to  be  doing 
effective  work  in  training  students  for  our  foreign  commerce. 

Books  I  would  recommend  for  foreign  trade  training  are: 
Hough,  Practical  Exporting,  Filsinger,  Exporting  to  South 
America.  Collateral:  Koebel,  South  America,  Cooper,  Under- 
standing South  America,  Collins,  Straight  Business  in  South 
America,  Henius,  A.  B.  C.  of  Foreign  Trade,  Wolfe,  International 
Commerce. 

National  City  Bank,  Boston  University  (Havana  Branch)  in 
experimental  stage.  General  Motors  Export  Co.  are  training  men 
for  overseas  trade.  United  Fruit  and  Standard  Oil  prefer  men 
with  School  of  Commerce  training. 

Some  vital  subjects  for  a  study  course  to  fit  men  for  foreign 
trade  are:  language  and  customs  of  the  people;  document  work; 
marketing;  principals  of  foreign  trade,  etc.  I  expect  to  follow 
fairly  closely  the  scheme  of  courses  of  R.  S.  MacElwee,  Director 
of  the  Bureau  of  Foreign  and  Domestic  Commerce,  Washington, 
D.  C,  which  is  outlined  in  his  bulletin,  Miscellaneous  Series,  97. 
Our  classes  here  take  practice  trips  to  industrial  centers  and  to 
the  ports  to  see  the  shipping,  unloading,  customs  procedure,  etc. 
This  is  the  first  year  of  our  foreign  trade  work.  It  has  developed 
far  ahead  of  our  expectations. 

Georgetown  University,  Washington,  D.  C. 

The  school  has  enjoyed  remarkable  success  in  this  course  of 
Foreign   Service.     Starting  with  seventy  students  the  opening 


72         FOREIGN  TRADE  MARKETS  AND  METHODS 

semester  (February,  1919),  we  had  two  hundred  and  ninety 
(October,  1919),  and  at  present  we  have  three  hundred  and  eighty 
after  having  turned  away  over  three  hundred  applicants  for  lack 
of  accommodations.  Although  this  year  witnesses  the  first  gradua- 
tion, many  of  our  students  have  already  become  well  located  in 
foreign  service. 

Due  to  the  lack  of  suitable  text  books  the  School  is  having 
a  number  of  our  courses  published  in  book  form  at  the  end  of 
the  academic  year.  Thus  for  next  year  we  expect  to  have 
published  a  practical  Chinese-English  grammar  by  Dr.  Chen,  a 
Spanish  course  by  a  member  of  the  International  High  Com- 
mission, a  course  on  International  Relations  by  Dr.  James  Brown 
Scott,  Secretary  of  the  Carnegie  Endowment  for  International 
Peace,  a  course  on  Consular  Procedure  by  Mr.  Frost,  Foreign 
Trade  Adviser,  State  Department,  a  course  on  Sales  Practice  by 
Dr.  MacElwee,  Director  of  the  Bureau  of  Foreign  &  Domestic 
Commerce. 

Students  are  examined  by  means  of  frequent  written  and  oral 
quizzes  and  semi-annual  examinations.  We  invite  your  attention 
to  the  last  paragraph  on  page  10  of  Bulletin  9. 

Bulletin  10,  which  gives  complete  announcement  of 
classes  for  Second  Semester  of  Academic  Year,  1920-21, 
Georgetown  University,  can  be  secured  by  writing  to  The 
Regent,  Georgetown  University  of  Foreign  Service,  Sixth 
and  E  Streets,  N.  W.,  Washington,  D.  C. — Greorgetown 
is  presenting  a  two  years'  course  in  foreign  trade  at 
present  and  out  of  400  students  300  are  taking  Spanish. 

General  Motors  Export  Company,  New  York  City. 

Unfortunately,  on  account  of  the  recent  and  rapid  growth  of 
our  export  trade,  very  few  Americans,  trained  and  experienced 
in  the  export  field,  are  available  for  foreign  service.  Therefore, 
the  American  manufacturer  who  wishes  to  expand  his  overseas 
forces  and  to  develop  his  organization  is  obliged  either  to  take 
men  trained  in  the  domestic  field  and  to  transplant  them  into 
unfamiliar  surroundings  and  conditions  abroad,  or  to  give  young 
men  of  the  desired  mental,  moral  and  physical  caliber  a  course 
of  intensive  training  for  over-seas  service. 

The  General  Motors  Export  Company  has  selected  the  latter 
alternative  as  the  one  most  likely  to  provide  men  quaUfied  to 


TRAINING  FOR  FOREIGN  COMMERCE  73 

uphold  successfully  the  best  traditions  of  American  business 
here  and  abroad.  It  has  established  and  is  now  conducting  the 
General  Motors  Export  Company's  Training  School,  which  is 
designed  to  equip  men  to  represent  it  in  the  various  branches  of 
its  foreign  activities  after  a  thorough  training  in  its  classrooms, 
shops  and  offices. 

Due  to  the  fact  that  a  year  is  the  minimum  time  required  to 
teach  even  men  of  exceptional  ability  the  rudiments  of  the  export 
business  and  the  merchandising  in  over-seas  territory  of  the  nu- 
merous products"  (including  motor  cars,  trucks,  tractors,  and  light- 
ing outfits)  which  this  Company,  as  the  export  division  of  the 
General  Motors  Corporation,  markets,  it  is  necessary  that  the 
men  accepted  for  training  possess  most  of  the  known  essentials 
for  success  in  the  overseas  business  fields  before  entering  the 
Training  School. 

Our  Company  maintains  a  library  to  which  are  constantly 
being  added  such  books  on  business,  commercial  geography,  and 
foreign  trade  in  general  as  recommend  themselves  to  our  favorable 
consideration. 

A  daily  News  Annalist  published  within  our  office,  and  con- 
taining extracts  on  commerce  in  general  taken  from  various 
newspapers  and  publications,  domestic  and  foreign,  is  also  used 
in  giving  our  men  general  and  specific  knowledge  concerning  our 
trade  abroad. 

Since  this  Company  offers  to  certain  selected  employees  full 
enrollment  in  the  School,  and  to  any  employee  the  privilege  of 
enrolling  for  such  of  the  Courses  as  will  make  him  more  valuable, 
it  has  not  been  felt  necessary  to  recommend  outside  study. 

Although  it  might  be  safe  to  say  that  the  best  men  usually 
come  from  the  colleges  of  commerce,  and  graduate  schools  of 
business  administration,  this  Company  has  found  good  material 
within  its  own  ranks  as  well  as  elsewhere.  Since  the  course  has 
been  established  only  since  April,  1920,  sufficient  time  has  not 
elapsed  to  make  a  definite  statement  which  would  serve  as  a 
guiding  principle. 

It  is  felt  that,  other  things  being  equal,  a  college  graduate  will 
forge  ahead  faster  after  he  has  assimilated  the  technical  knowl- 
edge necessary  to  the  understanding  of  the  business. 

Naturally  it  is  thought  that  the  ideal  means  for  fitting  men 
to  take  responsible  positions  abroad  is  through  the  estabUshment 
of  a  training  school  operated  by  a  Company;  but  since  many 
firms  would  not  find  so  expensive  am  operation  profitable,  it  is 


74        FOREIGN  TRADE  MARKETS  AND  METHODS 

believed  that  sufifielently  specialized  courses  can  be  had  in  some 
of  the  larger  universities. 

This,  of  course,  does  not  help  firms  which  may  be  situated  at 
a  distance  from  these  seats  of  learning.  In  such  eases  we  believe 
that  enrollment  in  recognized  correspondence  schools  is  helpful, 
but  that  it  should  be  supplemented  with  weekly  discussion  periods, 
attended  by  executives  of  the  Company  and  backed  up  with  the 
employees'  practical  application  to  their  own  business. 

E.  I.  DuPONT  DE  Nemours  Export  Company,  New  York  City. 

We  have  no  particular  school  for  training  our  foreign  repre- 
sentatives, but  the  Domestic  Company  maintains  at  Wilmington 
a  school  for  the  education  of  salesmen.  This  course  takes  fi'om 
three  to  four  months  and  educates  the  employees  as  regards  the 
manufacture  and  use  of  the  various  products  of  our  Company. 

After  this  course  has  been  completed  a  representative,  if  he 
is  to  be  connected  with  the  Export  Company,  is  brought  to  our 
main  office  in  New  York  and  kept  there  from  one  to  two  months 
and  is  given  an  education  in  our  methods  of  doing  business 
through  our  various  departments,  such  as  the  Order  Department, 
Advertising  Division,  Filing  Department,  etc.,  depending  upon 
whether  he  is  to  be  a  salesman,  a  sales  representative,  or  an 
office  man  in  one  of  our  foreign  offices. 

Before  entering  the  services  of  our  Company  it  is  necessary 
for  an  applicant  to  interview  at  least  three  of  our  representatives 
and  also  to  pass  a  physical  examination.  If  the  interviews  and 
physical  examination  are  satisfaetoiy  the  applicant  is  then  placed 
on  the  regular  payroll  and  sent  to  the  school  for  training,  we 
continuing  to  pay  his  salary  while  he  is  in  the  period  of  pre- 
paration. Of  course  if  he  fails  to  pass  the  Educational  Course 
his  services  are  discontinued. 

So  far  as  the  value  of  a  college  training  is  concerned  I  am  not 
prepared  to  make  any  definite  statement  as  very  few  of  our 
representatives  are  college  men  and  the  few  that  are  do  not 
enjoy  any  better  positions  than  those  who  have  not  had  such 
advantages. 

Practically  all  of  the  employees  of  the  Export  Company  in 
executive  positions  are  old  employees  of  the  Domestic  Company, 
having  grown  up  with  the  Company  and  been  with  it  from  ten 
to  twenty  years.  Any  new  men  that  we  have  taken  on  have  been 
chosen  more  because  of  their  particular  knowledge  of  the  posi- 


TRAINING  FOR  FOREIGN  COMMERCE  73 

tion  in  which  we  wished  to  place  them  than  from  any  thought  as 
to  whether  they  had  or  had  not  a  college  education. 

The  Guaranty  Trust  Company,  New  York  City. 

We  have  no  course  of  training  designed  particularly  to  train 
men  for  work  in  our  foreign  offices. 

We  have  a  Foreign  Exchange  and  Foreign  Banking  Course  in 
which  about  280  employees  are  enrolled.  Most  of  those  taking 
the  course  are  employed  in  our  Foreign  Department,  although 
about  one  fourth  of  the  total  number  consists  of  men  and  women 
from  the  other  departments  of  the  company. 

The  aim  of  this  course  is  to  give  employees  of  the  Foreign 
Department  particularly  and  the  employees  of  other  dei^artments, 
as  well,  a  knowledge  of  the  theory  of  foreign  exchange  and 
foreign  banking  and  with  it  a  practical  explanation  of  the 
functions  of  our  own  foreign  department. 

While  the  course  does  not  directly  train  men  for  foreign 
service,  it  indirectly  should  increase  the  fitness  of  the  employees 
of  the  foreign  department  for  work  in  our  branches  abroad.  The 
practice  of  this  company  is  to  select  for  service  in  its  foreign 
offices  men  who  have  had  experience  in  our  foreign  department 
here.  The  greater  proportion  of  employees  in  our  foreign  offices, 
however,  consists  of  natives. 

We  have  a  library  in  the  Educational  Department  for  the 
general  use  of  the  students  of  all  departments  of  the  company. 
Part  of  this  library  consists  of  books  on  foreign  exchange,  foreign 
trade  and  acceptances.  There  are  two  other  libraries  in  this 
institution:  (1)  The  Guaranty  Club  Library,  which  contains  a 
few  books  on  foreign  exchange  and  foreign  trade;  (2)  the  Refer- 
ence Library,  which  carries  a  very  extensive  number  of  foreign 
exchange  and  foreign  trade  books,  and  also  receives  newspapers, 
magazines,  and  other  periodicals  on  all  phases  of  foreign  exchange 
and  foreign  commerce. 

All  of  these  libraries  are  available  to  the  use  of  employees  at 
any  time. 

The  employees  of  the  foreign  department  come  from  no  par- 
ticular class  of  men,  except  in  so  far  as  the  general  type  of 
employees  of  banks,  brokerage  and  business  houses  may  be  called 
a  class.  In  some  parts  of  the  foreign  department,  especially  in 
those  dealing  with  foreign  exchange,  import  and  export  training 
is  more  desirable. 


76         FOREIGN  TRADE  MARKETS  AND  METHODS 

In  recent  years,  however,  the  company  has  established  an  Edu- 
cational Department  which  takes  in  about  40  to  50  college 
graduates  each  year,  for  the  purpose  of  giving  them  a  general 
training  in  all  the  departments  of  the  company  in  order  to  fit 
them  for  positions  of  importance  in  whatever  department  they 
prove  to  be  best  fitted  for  after  having  completed  a  study  of  the 
company  as  a  whole. 

Of  the  college  men  who  have  come  into  the  educational  depart- 
ment and  who  have  completed  the  general  training  course,  a  num- 
ber have  already  been  sent  to  this  company's  offices  in  London, 
Paris,  Brussels,  Havre  and  Constantinople. 

In  my  opinion,  as  a  general  thing,  the  college  man  with  a 
sufficient  amount  of  training  in  the  home  office  is  of  more  value 
than  the  non-college  man  of  experience  in  service  abroad,  because 
of  the  college  man's  broader  viewpoint  on  history,  geography  and 
political  economy  of  the  various  countries,  because  of  his  usually 
better  knowledge  of  languages,  and  also  because  of  his  general 
superiority  in  matters  of  contact  with  foreigners,  both  in  a  busi- 
ness way  and  socially. 

I  should  suggest  as  some  of  the  most  important  matters  of 
training  for  reponsible  trade  positions  abroad,  the  following: 

1.  A  thorough  knowledge  of  the  language  of  the  foreign 
country  in  which  the  individual  aims  to  work. 

2.  A  broad  study  of  the  geography,  history  and  commercial 
laws  of  that  country. 

3.  A  study  of  exporting  and  importing  procedure  both  here 
and  in  the  foreign  country. 

4.  A  study  of  foreign  exchange  and  the  financing  of  imports 
and  exports  by  banks,  both  American  and  foreign. 

5.  An  extensive  reading  of  English,  French  and  German 
methods  of  trade  (selling  and  financing)  in  the  foreign 
country. 

6.  A  thorough  reading  of  publications  of  the  Bureau  of 
Foreign    and    Domestic    Commerce    and    other   American 

periodicals  on  exporting  and  trade  opportunities. 

"We  have  found  the  following  books  and  literature  useful  in 
connection  with  our  courses  in  Foreign  Exchange,  Foreign  Trade, 
etc.:  Foreign  Exchange,  by  A.  C.  Whitaker;  Foreign  Exchange 
Explained,  by  F.  Escher;  Domestic  a/nd  Foreign  Exchange,  by 
E.   L.    Stewart-Patterson;   Modern  Foreign    Exchange,    by    V. 


TRAINING  FOR  FOREIGN  COMMERCE  77 

Gonzales;  Foreign  Trade  and  Shipping,  by  J.  A.  de  Haas; 
Foreign  Credits,  Special  Agents  Series  No.  63,  by  Wolfe,  Bureau 
of  Foreign  &  Domestic  Commerce;  Arbitrage,  by  H.  Deutsch. 

During  the  period  of  the  war  the  work  of  the  Educational 
Department  was  carried  on  under  difficulties  natural  to  such  a 
period  of  change.  Within  the  last  few  months  new  plans  have 
been  made  for  the  organization  of  this  work,  and  the  carrying 
out  of  a  more  comprehensive  and  thoroughgoing  program  than 
has  hitherto  been  attempted. 

It  has  been  realized  for  some  time  both  by  the  Guaranty  Trust 
Company  and  by  other  large  financial  and  industrial  concerns 
that  for  any  business  enterprise  involving  a  personnel  running 
into  the  hundreds  or  thousands,  a  well  formulated  educational 
program  is  one  of  the  essentials  of  sound  organization.  The 
mere  size  of  the  enterprise  makes  necessary  a  considerable  num- 
ber of  separate  departments,  the  work  of  each  department  being 
highly  specialized.  Efficient  organization  entails  also,  through 
the  various  departments,  a  considerable  amount  of  work  involv- 
ing somewhat  monotonous  routine.  The  cases  are  necessarily  very 
numerous  in  which  a  man's  work  does  not  of  itself  provide  the 
means  for  the  proper  development  of  his  abilities.  This  may  be 
ti-u3  even  of  the  responsible  heads  of  the  departments  and  divi- 
sions, who,  while  admittedly  experts  in  their  particular  fields, 
may  nevertheless  be  lacking  not  only  in  a  comprehension  of  the 
work  of  other  departments,  but  in  the  broad  grasp  of  business 
and  public  affairs,  which  is  so  essential  for  the  man  who  is  to 
hold  a  high  position  in  the  banking  world. 

It  is  a  conviction  of  this  Company  that  every  officer 
and  every  employee  should  be  constantly  growing,  and  that 
upon  this  growth  in  knowledge  and  power  depends  both  the 
welfare  of  the  individual  and  the  whole  success  of  the  Company. 
There  is  a  plain  need,  then,  that  a  man's  daily  work  should  be 
supplemented  by  some  carefully  planned  course  of  training,  in 
order  that  the  value  of  his  services  may  increase  with  the  con- 
tinued development  of  his  powers.  While  every  man  is  primarily 
responsible  for  his  own  development,  there  is  much  which  can 
be  accomplished  by  the  organization  of  a  systematic  plan  of 
training.  The  Education  Department  is  therefore  studying  the 
educational  needs  of  our  whole  personnel  and  will  provide  for 
them  as  far  as  possible. 

It  is  the  desire  of  the  Company  to  follow  throughout  its  whole 
organization  the  plan  of  promotion  from  lower  to  higher  posi- 


78         FOREIGN  TRADE  MARKETS  AND  METHODS 

tions.  In  the  selection  of  officers,  for  example,  though  the 
appointment  of  men  from  outside  the  Company  has  not 
been  uncommon,  it  has  generally  been  for  the  reason  that 
the  man  selected  has  had  certain  necessary  qualifications 
which  were  not  to  be  found  within  our  ranks.  It  is  the 
definite  policy,  however,  to  develop  and  recruit  future  officers 
as  far  as  possible  from  within.  As  a  means  to  this  end 
the  Educational  Department  has  arranged  for  the  selection  from 
various  parts  of  our  organization  of  a  gxoup  of  men  who  will 
be  given  a  special  course  of  training  in  the  work  of  all  the 
important  departments  of  the  Company  and  who  will  be  given 
other  facilities  for  broadening  their  knowledge  of  finance  and 
business.  This  group  is  to  be  made  up  of  men  who  have  been 
with  the  Company  for  a  period  of  years  and  who  have  shown  by 
their  loyalty  to  its  interests,  their  whole-hearted  devotion  to  their 
work,  and  the  development  of  their  powers  which  they  have 
already  achieved,  that  their  value  to  the  company  is  likely  to 
increase  with  the  continued  development  of  their  abilities.  The 
Guaranty  Trust  Company,  with  its  rapidly  giowing  business  and 
its  affiliations  with  numerous  subsidiary  and  related  companies, 
is  constantly  in  need  of  men  with  the  necessary  training,  person- 
ality, and  force  of  character  for  executive  positions  of  respon- 
sibility and  trust.  It  is  confidently  expected  that  the  general 
training  course  which  is  being  conducted  by  the  Educational 
Department  will  provide  a  flow  of  men  qualified  for  the  exact- 
ing duties  of  positions  of  this  kind. 

The  men  who  take  this  course  of  training  will  spend  a  certain 
amount  of  time  in  each  of  the  fundamental  departments,  learn- 
ing its  work  partially  by  taking  part  in  it,  partially  by  systematic 
study  and  discussion.  There  wiU  be  considerable  differences  in 
the  knowledge  which  these  men  have  of  the  various  departments 
of  the  Company  other  than  their  own.  The  amount  of  time  to 
be  devoted  to  the  special  training  will  therefore  vary.  In  some 
cases  after  a  man  has  acquired  a  general  knowledge  of  the  work 
done  by  the  Company  in  New  York,  he  may  be  sent  for  a  period 
to  one  or  more  of  our  foreign  offices.  The  end  in  view  through- 
out will  be  to  broaden  his  knowledge  and  his  point  of  view,  so 
that  in  addition  to  the  intimate  acquaintance  which  he  has  with 
one  or  more  specialized  departments,  he  will  develop  that  broad 
grasp  of  affairs  so  much  needed  by  the  executive  charged  with 
large  responsibility.  The  Educational  Department  is  progressing 
very  carefully  to  the  choice  of  these  men,  for  the  reason  that  a 


TRAINING  FOR  FOREIGN  COMMERCE  79 

wise  selection  will  be  of  considerable  importance  both  to  the 
individual  and  to  the  Company. 

Arrangements  will  be  made  in  the  various  departments  for  the 
work  of  the  men  who  are  taking  this  general  training.  In  all 
cases  it  will  be  the  aim  to  acquaint  the  man  to  some  extent  with 
the  work  of  a  department,  or  division,  before  he  enters  it.  In 
the  Bond  Depaiiment  the  men  will  be  given  a  special  course  of 
instruction  in  investments  somewhat  similar  to  that  which  has 
been  given  to  bond-salesmen  in  the  past. 

In  taking  on  new  employees  it  has  been  the  practice  of  the 
Company  to  assign  a  man  to  a  particular  department  where  he 
stays  for  an  indefinite  period  learning  thoroughly  the  work  of 
that  one  department,  but  having  little  opportunity  to  acquire  a 
grasp  of  what  the  other  departments  are  doing.  To  a  certain 
extent  it  is  planned  to  modify  this  procedure  by  giving  new  men, 
who  already  have  some  knowledge  of  banking,  an  opportunity 
to  learn  the  work  of  a  number  of  the  more  fundamental  depart- 
ments before  being  placed  definitely  in  a  particular  one. 

In  addition  to  the  special  course  of  training  which  has  been 
described,  the  Educational  Department  will  also  make  provision, 
much  as  has  been  done  in  the  past,  for  courses  in  certain  sub- 
jects related  to  the  work  of  the  Company,  such  as  Domestic 
Banking,  Foreign  Banking  and  Exchange,  Credit  and  Invest- 
ments, Business  English  and  Languages.  The  department  is  also 
equipped  to  give  advice  and  suggestions  in  regard  to  systematic 
courses  of  training  offered  by  universities,  commercial  schools  and 
other  agencies. 

As  the  war  has  brought  into  the  service  of  the  Company  a 
much  larger  percentage  of  women  than  formerly,  the  Educational 
Department  expects  to  make  a  somewhat  special  survey  of  their 
needs  and  make  such  provision  for  meeting  them  as  may  seem 
necessary. 

Mr.  Adriance,  who  is  in  charge  of  the  educational  work 
of  the  Guaranty  Trust  Company,  was  formerly  professor 
of  Economics  and  Banking  at  Princeton  University.  Dur- 
ing the  early  part  of  the  war  he  sei'ved  as  Director  of  the 
Bureau  of  Research  of  the  War  Trade  Board.  This  was 
the  official  statistical  organization  of  the  Board.  It  had 
a  personnel  of  over  200  and  he  was  charged  with  the  duty 


80        FOREIGN  TRADE  MARKETS  AND  METHODS 

of  making  the  statistical  studies  required  by  the  Board 
in  the  conduct  of  his  work.  It  is  to  be  noted  that  business 
firms  are  seeking  highly  trained  men  to  conduct  their 
educational  departments. 

Eastman-  Kodak  Company^  Rochester,  N.  Y. 

The  greater  part  of  our  foreign  business  is  handled  through 
Kodak  Limited,  in  England,  and  not  direct  from  the  United 
States.  Men  sent  from  this  country  to  those  branches  which  are 
managed  direct  from  here,  fall  into  three  general  classes;  manu- 
facturing experts,  managers  and  assistants  for  foreign  sales 
branches,  and  foreign  demonstrators. 

Production  experts  sent  to  our  foreign  manufacturing  planta 
are  invariably  men  with  technical  training,  usually  with  a  special- 
ized knowledge  of  chemistry.  All  these  men  spend  considerable 
time  in  our  local  plants  before  being  assigned  to  posts  abroad, 
the  fundamental  requirement  being,  of  course,  a  thorough  knowl- 
edge of  photographic  products  and  their  uses.  Their  training 
is  largely  that  given  all  local  manufacturing  experts. 

In  the  case  of  managers  and  assistants  for  over-seas  sales 
branches,  and  foreign  demonstrators,  a  knowledge  of  our  products 
and  the  manner  of  handling  is  of  course  necessary,  but  the 
technical  knowledge  of  production  is  not  expected.  These  men 
receive  their  training  in  the  export  division  of  our  sales  depart- 
ment. They  become  thoroughly  familiar  with  methods  of  shipping 
and  billing,  with  foreign  correspondence,  and  the  customs,  require- 
ments of  the  country  to  which  they  are  to  go.  They  are  also 
expected  to  secure  a  reasonable  familiarity  with  the  language 
and  with  the  general  nature  and  conditions  of  the  country  con- 
cerned. 

The  company  has  at  present  a  method  whereby  the  tuition  up 
to  a  certain  point  is  paid  for  employees  who  satisfactorily  com- 
plete courses  in  approved  schools.  At  the  present  time  this  does 
not  apply  to  those  receiving  private  instruction. 

There  is  not  a  special  class  from  which  most  of  our  men  are 
selected,  save  in  the  case  of  technical  experts,  as  noted  above. 
Special  consideration,  however,  is  of  course  given  to  those  already 
having  qualifications  which  fit  them  for  this  work,  such  as  a  knowl- 
edge of  foreign  languages  and  customs,  and  a  knowledge  of 
photographic  materials.  It  appears  sometimes  to  be  the  case  that 
college  trained  men  adapt  themselves  more  easily  to  the  eon- 


TRAINING  FOR  FOREIGN  COMMERCE  81 

ditions  of  foreign  trade,  and  may  more  quickly  secure  a  proper 
understanding  of  foreign  conditions  and  methods  of  business. 

Some  of  the  most  necessary  qualifications  for  work  of  this  kind 
seem  to  be  a  knowledge  of  the  product  and  the  general  policy 
of  the  company,  and  as  thorough  an  understanding  as  possible 
of  the  language  and  mode  of  thought  of  the  country  in  which 
business  is  to  be  carried  on. 


Boston  University,  Boston,  Mass. 

The  courses  in  Foreign  Trade  training  and  in  kindred  subjects 
given  at  Boston  University  occupy  a  prominent  place  in  the 
curriculum.  Special  attention  has  been  given  to  Latin-American 
relations  and  to  the  Spanish  language. 

In  the  past  few  years  the  "Laboratory  plan"  of  combining 
class  room  instruction  with  practical  experience  in  shop  or  count- 
ing-house has  proved  to  be  the  most  satisfactory  f onn  of  industrial 
or  commercial  education.  In  the  College  of  Business  Adminis- 
tration of  Boston  University,  for  example,  the  four  year  course 
leading  to  the  degree  of  Bachelor  of  Business  Administration 
provides  for  one  full  year  of  supervised  employment  as  an 
integral  part  of  the  course  of  study. 

The  University  now  announces  a  laboratory  program  for  its 
Latin  American  trade  courses,  through  the  establishment  of  a 
branch  college  in  Havana,  Cuba,  where  students  regxilarly  regis- 
tered in  the  college  at  Boston  may  take  a  part  of  their  college 
course,  thus  having  the  opportunity  to  learn  Spanish  in  a  Spanish 
country,  and  to  become  personally  acquainted  with  Spanish 
American  life  and  customers. 

The  Havana  Branch  is  supported  jointly  by  Boston  University 
and  a  local  Board  of  Guarantors,  representing  the  principal  busi- 
ness interests  in  Cuba.  The  instructors  are  members  of  the  regular 
faculty  of  Boston  University.  The  courses  parallel  those  given 
in  Boston  University  except  that  they  are,  in  general,  conducted 
in  Spanish. 

American  students  will  not  be  admitted  directly  to  the  Havana 
Branch,  but  must  spend  at  least  one  year  in  Boston,  where  they 
may  take  intensive  courses  in  Spanish  and  in  other  subjects 
intended  as  special  preparation  for  the  work  in  Cuba. 

Cuban  and  other  Spanish  speaking  students  may,  after  a 
similar  preparatory  year  in  Havana,  transfer  to  Boston. 

Without  intending  to  reflect  upon  other  institutions,  I  know 


82         FOREIGN  TRADE  MARKETS  AND  METHODS 

of  but  one  doing  effective  work  of  this  nature:  the  College  of 
Business  Administration  of  Boston  University. 

Books  that  we  have  found  helpful  in  connection  with  Foreign 
Trade  training  are:  Kidd  on  Foreign  Trade;  Ford's  Foreign 
Trade  of  the  United  States;  Hough's  Practical  Exporting;  John- 
son and  Huebner's  Principles  of  Ocean  Transportation;  Esther's 
Principles  of  Foreign  Exchange;  Marshall's  Industry  and  Trade; 
Savay's  Principles  of  Foreign  Trade;  Selling  in  Foreign  Mar- 
kets, Bureau  of  Foreign  and  Domestic  Commerce;  De  Haas' 
Foreign  Trade  and  Shipping;  Shugi-ue's  Problems  in  Foreign 
Exchange. 

An  arrangement,  similar  to  the  Havana  branch,  by  which 
students  may  spend  two  years  or  more  of  their  course  in  China 
is  now  being  completed. 

Armour  and  Company^  Chicago,  111. 

The  chief  agency  employed  by  us  for  training  employees  for 
work  in  foreign  countries  is  work  in  the  Foreign  Department. 
Usually  men  are  selected  for  this  work  who  have  had  considerable 
and  varied  experience  in  our  organization  and  have  a  general 
working  knowledge  of  the  business  together  with  some  idea  of 
policy  matters,  as  for  instance  in  the  case  of  the  writer  at  present 
in  charge  of  the  Foreign  Accounting  Department,  which  includes 
Foreign  Banking,  Foreign  Exchange,  Marine  Insurance  and 
Shipping  Documents. 

After  twelve  years'  experience  in  various  capacities  in  the 
domestic  end  of  the  business,  he  was  sent  to  Europe  where  he 
spent  the  largest  part  of  three  years  in  the  United  Kingdom, 
France,  Italy,  Scandinavia  and  Germany  to  be  returned  to 
Chicago  to  the  Foreign  Accounting  Department  where  after  about 
a  year's  time  he  was  placed  in  charge  of  the  above.  In  other 
cases  where  the  men  were  being  trained  for  the  Foreign  Sales 
Department  they  were  sent  to  South  America  and  later  to  various 
European  markets  and  afterwards  brought  into  Chicago  and 
attached  to  the  Foreign  Sales. 

It  might  be  interesting  to  note  here  a  few  remarks  with  regard 
to  the  policy  adopted  by  some  of  the  larger  firms  abroad  and 
notably  British  and  European  firms.  Young  men  and  in  some 
cases  young  women  who  show  an  aptitude  for  trade  and  are  good 
linguists  are  encouraged  to  make  themselves  proficient  in  the 
language  of  the  countries  they  intend  to  work  in;  are  then  taken 
into  the  offices,  warehouses  and  plants  of  the  house  and  given 


TRAINING  FOR  FOREIGN  COMMERCE  83 

a  general  training  of  their  whole  business  from  the  ground  up, 
specializing  in  the  work  they  intend  to  handle  abroad.  It  is 
required  that  they  study  the  history  of  the  country  they  intend 
locating  in,  the  political  and  social  conditions  as  they  exist  and 
to  become  generally  conversant  with  affairs  in  addition  to  the 
trade  requirements,  and  when  fully  equipped  they  are  sent  out. 

The  most  helpful  information  that  we  have  been  able  to  obtain 
for  the  purpose  of  keeping  the  Foreign  Department  informed 
regarding  trade  abroad  is  through  the  medium  of  weekly  letters 
from  our  Agents  and  Managers  at  the  foreign  houses.  These 
letters  come  in  regularly  and  give  a  general  view  of  the  situa- 
tion politically,  economically  and  in  fact  from  every  angle.  In 
all  these  various  countries  are  published  one  or  more  trade 
journals  and  a  careful  study  of  these  gives  one  a  very  good 
general  knowledge  concerning  trade  abroad.  There  are  also 
several  publications  in  this  country  that  are  of  value  to  those 
who  feel  interested  enough  to  make  a  study  of  these  problems. 

The  Company  does  not  meet  any  expenses  for  employees 
studying  outside  to  better  prepare  themselves  for  foreign  service. 
It  is  my  understanding  that  in  the  European  countries  some  of 
the  firms  do.  We  have,  however,  in  many  cases  where  we  found 
men  connected  with  foreign  branch  houses  who  were  engaged 
locally  and  who  show  a  thorough  interest  in  and  an  aptitude  for 
the  work  they  have  in  hand,  brought  these  men  over  to  America 
and  allowed  them  to  spend  considerable  time  going  through  the 
various  plants  and  packing  houses  thus  obtaining  a  practical 
education  making  them  better  posted  to  deal  with  their  work. 
This  has  proven  very  beneficial. 

In  forming  new  organizations  in  foreign  countries  we  have 
always  found  that  with  the  proper  nucleus  for  an  organization 
based  on  trained  employees  from  our  sei*vice  elsewhere,  we  have 
met  with  better  success  by  employing  a  staff  from  people  of  the 
country  where  the  business  is  being  established.  There  are  some 
exceptions  but  this  is  more  the  rule  than  the  exception. 

Our  preference  would  be  to  use  men  in  the  more  important 
positions  in  the  foreign  service  who  have  had  considerable  experi- 
ence in  the  firm's  business  rather  than  perhaps  the  better  educated 
college  men  who  lack  experience,  but  the  combination  is  most 
desirable. 

There  are  several  essentials  necessary  for  fitting  a  man  for 
the  responsible  trade  positions  abroad,  one  in  particular  being, 
that  the  average  American  abroad  for  a  time  at  least  is  very 


84        FOREIGN  TRADE  MARKETS  AND  METHODS 

narrow  and  provincial.  Another  is,  that  he  is  as  a  rule  a  poor 
linguist.  Another  very  important  requisite  is,  that  a  man  in  a 
foreign  country  representing  an  American  house  should  adapt 
himself  to  the  local  conditions  and  thus  avoid  the  so  commonly 
prevalent  custom  (of  Americans)  of  comparing  local  conditions 
with  those  at  home  and  view  things  at  times  from  the  other 
fellow's  perspective.  He  must  become  a  public  spirited  man 
and  show  an  interest  in  all  things  going  on  around  him  and 
should  speak  well  the  language  of  the  country. 

University  of  Pennsylvania^  Philadelphia,  Pa.  (Wharton 
School  of  Finance  and  Commerce.  Grover  G.  Huebner,  Prof, 
of  Transportation  and  Commerce.) 

The  Wharton  School  of  Finance  and  Commerce  offers  a  four 
year  course  of  study  to  students  registering  for  'Preparation 
for  Foreign  Trade  Service.'  During  the  first  year  the  four  year 
students'  courses  are  the  same  as  those  prescribed  for  all  first 
year  students  in  the  Wharton  School.  They  include  business  law ; 
elementary  accounting;  general  economics;  resources  and  indus- 
tries of  the  United  States;  government;  and  English.  Specializa- 
tion in  foreign  trade  begins  during  the  second  year  and  increases 
in  extent  throughout  the  remainder  of  the  four  year  period. 

Mature  students  not  expecting  a  degree,  and  unable  to  attend 
for  a  period  of  four  years,  may  register  as  special  students  and 
complete  the  courses  dealing  directly  with  foreign  trade. 

The  reading  material  for  the  class  in  foreign  trade  methods 
consists  of  especially  prepared  mimeographed  assignments.  Al- 
though a  number  of  excellent  books  on  foreign  trade  have  been 
published,  none  has  quite  answered  the  purpose  as  a  text  book 
on  foreign  trade  methods.  Books  that  have  been  found  useful 
include :  Hough,  Practical  Exporting;  Preciado,  Exporting  to  the 
World;  Business  Training  Corporation,  Foreign  Trade  Course; 
Bureau  of  Foreign  and  Domestic  Commerce,  Selling  in  Foreign 
Markets,  and  also  Paper  Work  in  Export  Trade;  A.  J.  Wolfe, 
Theory  and  Practice  of  International  Commerce.  Many  of  the 
bulletins  of  the  Bureau  of  Foreign  and  Domestic  Commerce  deal- 
ing with  particular  commodities  and  markets  have  been  found 
useful. 

Books  used  in  courses  dealing  directly  with  foreign  trade  are: 
E.  R.  Johnson  and  G.  G.  Huebner,  Principles  of  Ocean  Transpor- 
tation; and  G.  G.  Huebner,  Ocean  Steamship  Traffic  Manage- 
ment. 


TRAINING  FOR  FOREIGN  CX)MMERCE  85 

Text  book  on  Marine  Insurance:  S.  S.  Huebner,  Marine 
Insurance. 

Text  book  on  History  of  Commerce:  E.  R.  Johnson  and  Col- 
laborators, History  of  Domestic  and  Foreign  Commerce  of  the 
United  States. 

Before  graduation  from  the  Wharton  School  each  student  is 
required  to  complete  a  piece  of  research  work,  and  business 
houses  are  cooperating  to  the  extent  of  supplying  them  with 
available  data,  answering  specific  inquiries  orally  or  in  writing, 
granting  extensive  interviews  and  permitting  students  to  familiar- 
ize themselves  with  their  methods  and  organization. 

Those  subjects  which  we  feel  have  the  most  vital  bearing  on 
foreign  trade  are:  Foreign  trade  methods;  Exporting  problems 
in  selected  foreign  markets;  Senior  research;  Ocean  shipping; 
Commercial  geography  (coui'ses  dealing  with  the  principal  foreign 
markets) ;  Consular  service;  Marine  insurance;  Money  and  credit; 
Foreign  languages. 

Harvard  University  {Graduate  School  of  Business  Administra- 
tion), Cambridge,  Mass. 

Our  students  are  all  college  graduates  to  begin  with.  It  is  our 
aim,  as  far  as  it  is  practicable,  to  give  the  men  as  classroom  work 
actual  business  problems  that  we  have  collected.  This  work  in 
problems  is  supplemented,  from  time  to  time,  by  business  men 
who  meet  the  class,  discuss  a  business  problem  with  them,  and 
leave  with  the  class  a  problem  for  solution.  Later,  these  men 
meet  with  the  membei's  of  the  class  and  discuss  their  solutions 
of  those  problems.  In  addition  to  this  problem  work,  our  men 
are  required  during  the  four  months  of  the  summer  vacation 
to  engage  in  distinctly  foreign  trade  work  either  in  a  busi- 
ness house  or  in  research  work. 

Our  course  is  two  years  in  length.  During  that  period  we  are 
more  anxious  to  give  men  a  broad  but  practical  foundation  than 
we  are  to  give  them  the  minute  technical  details  of  carrying  on 
foreign  trade  transactions.  Nevertheless,  we  intend  to  familiar- 
ize them  more  with  the  methods  and  to  acquaint  them  to  a  con- 
siderable degree  with  the  actual  technical  details. 

United  States  Steel  Corporation,  New  York  City. 

Our  United  States  Steel  Products  Company  have  had  in  force 
for  a  year  or  more,  a  foreign  service  class  for  training  ambitious 
and  promising  young  men,  who  are  in  the  employ  of  the  Company, 


86         FOREIGN  TRADE  MARKETS  AND  METHODS 

for  foreign  offices.  There  are  always  a  number  of  men  under- 
taking this  coui-se  for  various  lengths  of  time  as  circumstances 
or  immediate  necessity  permit,  by  which  they  progxess  through 
the  various  sales,  shipping  and  financial  divisions  of  the  New 
York  office. 

This  training,  in  many  instances,  is  supplemented  by  an 
especially  routed  trip  through  some  of  our  mills  where  goods 
are  manufactured. 

In  this  course,  we  have  included  men  employed  because  of  their 
special  quaUflcations  in  knowledge  of  foreign  languages,  or  in 
technical  or  engineering  training,  for  posts  where  this  was  imper- 
ative, and  among  them  have  been  numerous  college  graduates; 
but  s'uch  college  training  is  not  necessary  and  we  have  always 
given  preference  to  our  own  men  of  good  education,  appearance 
and  addi'ess,  who  have  shown  proper  application  and  promise, 
as  well  as  to  those  men  already  employed  in  our  subsidiary  com- 
panies who  have  had  mill  training  or  experience  in  selling  mill 
products. 

EOBT.  H.  Ingersoll  &  Bro._,  New  York  City. 

We  have  never  been  able  to  find  either  school  or  reference 
books  that  would  be  of  assistance  to  our  foreign  representatives. 
We  have,  therefore,  attempted  to  do  the  next  best  thing  by  getting 
men  of  the  right  sort,  trained  in  the  colleges  and  then  putting 
them  through  a  practical  course  of  training  in  our  offices  and 
later  in  a  foreign  territory. 

We  employ  language  study,  when  necessary,  in  training 
employees  for  work  in  foreign  countries  and  have  company 
coui'ses  in  selling  or  office  management,  etc.,  depending  on  the 
work  the  student  is  scheduled  to  do. 

Most  books  of  export  theory  and  practice  do  not  fit  in  with 
our  plans  and  are  apt  to  mislead  the  student.  We,  therefore, 
confine  our  future  representatives'  reading  to  our  house  litera- 
ture. 

We  have  no  outside  studies  provided  except  language.  Our 
men  are  paid  while  in  training. 

We  recruit  our  force  of  employees  largely  from  college 
graduates  having  at  least  a  rudimentary  knowledge  of  language 
to  be  used  in  future  work  and  with  other  necessaiy  qualifications. 

We  find  that  the  college  man  has  infinitely  more  value  for 
foreign  service  in  comparison  with  men  not  having  a  college 
training  but  who  have  had  experience  in  the  firm's  business. 


TRAINING  FOR  FOREIGN  COMMERCE  87 

Assuming  candidate  has  necessary  natural  qualifications,  we 
believe  the  most  vital  means  for  fitting  men  to  take  responsible 
trade  positions  abroad  are  a  careful  grounding  in  the  principles, 
policies  and  methods  of  our  business,  backed  by  some  actual 
experience  here.  If  possible,  we  recommend  some  practical  experi- 
ence in  a  nearby  'export'  territory  under  the  supervision  and 
watched  by  a  competent  member  of  our  organization. 

L.  E.  "Waterman  Company,  New  York  City. 

Originally  we  sent  from  here,  as  far  as  possible,  Americans 
who  wanted  to  enter  the  foreign  branch  of  our  trade.  Our 
universal  difficulty  was  in  keeping  these  men  in  the  foreign 
country  after  they  had  arrived.  One  by  one  they  have  returned 
to  good  old  New  York  or  the  U.  S.  A.  Our  policy  now  is  to 
bring  over  young  men  from  the  countries  in  which  they  are  to 
work  and  educate  them  here.  We  have  been  quite  successful  in 
this,  particularly  in  Europe.  In  South  America  not  so  successful, 
but  having  been  rather  slow  in  pushing  the  South  American  busi- 
ness for  the  last  two  years  our  policy  is  somewhat  unsettled. 
That  is  what  we  propose  to  do  when  we  are  able  to  enter  this 
field  afresh. 

Westinghouse   Electric    &   Manufacturing    Company,   East 
Pittsburgh,  Pa. 
The  educational  and  training  program  as  conducted  by  the 
Westinghouse   Electric   and  Mfg.    Company  is   divided   broadly 
into  two  parts: 

1.  Deals  with  the  preparation  of  the  individual  for  the  work 
which  he  is  hired  to  perform, 

2,  Is  intended  to  prepare  the  individual  for  a  position  of 

increased  responsibility  in  the  organization. 

During  the  past  year  approximately  3500  employees  have 
received  instruction  through  these  programs.  This  number  does 
not  take  into  consideration  those  who  have  been  benefited  by 
miscellaneous  lectures  or  who  have  received  instruction  for  their 
work  altogether  on  the  job. 

A  number  of  technically  trained  men  are  selected  each  year 
who  will  ultimately  take  up  positions  in  the  Commercial,  Engi- 
neering, Manufacturing  and  Erecting  Departments.  These  men 
are  selected  by  personal  interview  and  are  given  training  in 
various  phases  of  the  Company's  work  as  a  preparation  for  their 
ultimate  work  in  the  organization. 


88        FOREIGN  TRADE  MARKETS  AND  METHODS 

Individual  schedules  tare  made  out  for  each  man,  in  line  with 
his  interests,  and  the  woi'k  available.  In  general  these  schedules 
comprise  a  period  of  production  work  in  the  factory  where  the 
student  becomes  acquainted  with  manufacturing  processes,  the 
various  products  which  we  manufacture,  and  with  our  manu- 
facturing personnel.  During  this  period  of  practical  experience 
the  young  engineer  spends  two  hours  a  week  in  conference  with 
engineers  and  salesmen  who  handle  the  apparatus  on  which  they 
are  working  in  the  factory.  Within  two  months  each  student  is 
expected  more  or  less  definitely  to  select  the  line  of  work  in  the 
organization  which  he  will  later  on  take  up.  From  this  time  on, 
the  course  is  intended  to  lay  a  broad  foundation  for  this  work 
by  acquainting  the  student  with  the  various  kinds  of  work 
related  to  his  future  position  in  the  organization.  Some  of 
the  men  spend  a  portion  of  their  time  in  our  branch  plants  or 
subsidiary  companies;  others  receive  practically  all  of  their 
training  at  our  main  plant. 

The  training  in  general  covers  a  pei'iod  of  approximately  one 
year,  the  latter  portion  being  given  up  to  intensive  training  for 
the  work  to  be  undertaken,  the  student  being  given  from  one  to 
three  months'  time  to  become  acquainted  with  special  information 
which  he  will  need  to  know  in  handling  his  work. 

After  completing  the  training  period  students  take  up  their 
regular  work  in  the  organization  reporting  directly  to  the  execu- 
tives in  charge  of  the  various  divisions. 

During  this  period  of  preparation  these  men  receive  a  salary 
which  is  intended  to  adequately  cover  living  costs. 

A  number  of  high  school  graduates  are  selected  each  year  to 
take  up  work  of  a  semi-technical  nature  in  the  organization. 
These  men  are  selected  by  test  and  are  given  some  practical 
experience  in  production  and  clerical  work  to  acquaint  them 
broadly  with  the  company's  system  and  organization.  They  then 
take  up  regular  work  in  the  organization  with  an  opportunity 
to  follow  up  further  their  technical  training  by  means  of  evening 
schools. 

Other  courses  of  a  similar  nature  are  conducted  for  those  who 
have  had  to  drop  out  of  college  before  completing  their  work 
and  for  special  students  who  are  sent  in  to  be  trained  for  work 
with  our  customers,  either  in  this  country  or  abroad. 

Optional  courses  are  conducted  during  the  winter  months  at 
the  Westinghouse  Club  in  Wilkinsburg.  These  courses  afford  an 
opportunity   for  the  students   to  study   various  lines   of  work 


TRAINING  FOR  FOREIGN  COMMERCE  89 

which  supplement  the  instruction  wliich  they  receive  at  the  fac- 
tory in  line  with  their  desires. 

Optional  courses  in  Engineering  are  also  available  to  any 
employee  of  the  Westinghouse  Company,  through  the  Westing- 
house  Technical  Night  School  which  operates  in  the  local  Public 
School  buildings.  Through  these  courses  it  is  possible  for  any 
individual  who  has  the  proper  ambitions  and  qualifications  to 
ultimately  prepare  himself  for  responsible  work  in  the  organiza- 
tion. 

Approximately  1300  different  students  have  been  enrolled  in 
this  school  during  the  present  year. 

In  addition  to  the  four  year  Engineering  Course,  the  school 
conducts  a  Preparatory  Course  for  those  who  have  not  had  eight 
gi'ades  of  grammar  school,  a  course  in  English  for  foreign  bom 
men  for  those  who  wish  to  learn  our  language  and  miscellaneous 
courses  for  women  as  a  preparation  for  clerical,  stenographic  or 
other  work  carried  on  by  women  in  modern  office  practice. 

The  school  is  supported  by  the  students,  the  local  Public  School 
districts  and  the  industry.  Instruction  is  carried  on  by  a  staff 
of  75  men  and  women  the  most  of  whom  are  selected  from  the 
industry  and  instructed  in  the  methods  of  teaching. 

The  majority  of  the  graduates  of  this  school  are  successfully 
engaged  in  commercial,  engineering  or  executive  work. 

Four  year  courses  are  conducted  for  grammar  school  graduates 
with  a  view  of  preparing  them  for  trades  work.  The  program 
consists  of  practical  experience  in  the  factory  on  various  opera- 
tions and  processes,  supplemented  by  four  hours  per  week  in  the 
Trades  Apprentice  School.  Those  who  complete  this  training 
are  well  qualified  to  follow  the  work  of  the  trade  taken,  such 
as  Pattern  Making,  Foundry  Practice,  Machine  Shop  Practice, 
Tool  Making,  and  Design,  or  Electrical  work. 

These  men  are  also  available  for  executive  positions  requiring 
a  broad  understanding  of  manufacturing  operations. 

A  two  year  course  is  conducted  to  prepare  high  school  graduates 
for  positions  in  our  various  drafting  rooms.  A  preliminary 
period  of  intensive  instruction  is  given  the  men  to  prepare  them 
for  tracing  work.  They  are  then  placed  in  a  position  in  the 
Drafting  Room  and  given  six  hours  per  week  instruction  in  the 
Educational  Department. 

After  approximately  a  year  in  the  Drafting  Room  these  men 
are  transferred  to  the  factory  where  they  receive  practical  experi- 


90         FOREIGN  TRADE  MARKETS  AND  METHODS 

ence,  becoming  acquainted  with  processes,  materials,  etc.,  used  in 
carrying  out  their  designs. 

In  addition  to  these  major  programs  a  number  of  other  courses 
are  conducted  to  suit  temporary  or  local  needs.  Among  these 
might  be  mentioned  noon  lectures,  for  office  employees,  held  in 
the  Educational  Department  during  the  winter  months;  evening 
courses  in  Spanish;  factory  classes  in  English  for  foreign  bom 
men;  stenographic  training  and  part  time  training  for  Produc- 
tion, Time  and  Cost  clerks. 

The  Westinghouse  Company,  as  a  memorial  to  those  employees 
who  entered  the  World  War,  offers  each  year  four  scholarships  in 
technical  schools,  to  employees  or  sons  of  employees. 

A  large  number  of  our  employees  are  enrolled  in  outside 
educational  institutions  such  as,  Carnegie  Institute  of  Technology, 
University  of  Pittsburgh,  Duquesne  University,  Y.  M.  C.  A., 
Carnegie  Library  and  Alexander  Hamilton  Institute. 

The  problem  of  training  for  foreign  trade  naturally  divides 
itself  into  three  parts : 

1.  Knowledge  of  the  organization,  products  and  policies  of 
the  concern  represented. 

2.  Knowledge   of   the   business   conditions,   people,   language 
and  customs  existing  in  the  foreign  field. 

3.  A  knowledge  of  exchange,  shipping,  inter-government  rela- 
tions, etc.,  necessary  in  order  to  conduct  the  business. 

Our  program  has  dealt  primarily  with  the  first  of  these  three 
relations.  The  majority  of  our  salesmen  are  technical  graduates. 
Their  industrial  training  has  consisted  of  some  practical  experi- 
ence on  the  various  products  which  we  manufacture,  weekly  con- 
ferences' with  salesmen  on  the  problems  connected  with  each  of 
our  products,  and  a  final  one  month's  sales  school  which  aims 
to  coordinate  the  experience  and  to  inspire  the  young  engineer 
with  the  proper  respect  for  the  work  and  interest  in  it. 

The  National  City  Bank,  New  York  City. 

The  work  of  The  National  City  Bank  in  specifically  training 
men  for  service  in  its  foreign  branches  began  in  1915.  Unusual 
advances  had  been  made  in  establishing  connections  with  the 
bank  abroad,  and  still  greater  advances  were  planned.  The  need 
was  distinctly  felt  for  men  of  good  education  who  had  a  general 
training  in  foreign  banking  and  who  would,  under  reasonable 
direction,  give  promise  of  development  into  capable  foreign 
executives.     It  was  decided  to  select  a  limited  number  of  men 


TRAINING  FOR  FOREIGN  COMMERCE  91 

from  American  colleges  and  universities,  and  with  this  in  mind 
a  few  of  the  more  representative  educational  institutions  of  the 
East  were  asked  to  cooperate  in  the  selection  of  suitable  can- 
didates. The  result  of  the  plan  was  highly  successful — so  much 
so  that  it  was  continued  each  subsequent  year,  notwithstanding 
the  interraption  of  the  War.  Details  of  the  plan  were  changed, 
as  experience  showed  a  more  practicable  method,  but  in  general 
the  features  of  the  training  class  have  remained  the  same.  From 
a  small  nucleus  of  twenty-three  men  in  1915,  the  class  has  grown 
until  at  times  there  have  been  as  many  as  seventy  members. 
Last  year  the  increasing  interest  of  American  men  in  foreign 
commerce,  coupled  with  the  knowledge  that  a  training  course 
for  foreign  service  was  offered  by  this  institution,  resulted  in 
more  than  one  hundred  schools  and  colleges  making  nominations 
of  over  three  hundred  college  students  for  entrance  into  the 
class,  in  addition  to  a  large  number  of  applications  which  were 
received  at  random. 

The  college  students  are  brought  to  the  Bank  for  the  two 
months'  summer  vacation,  during  which  time  they  are  rotated, 
according  to  a  definite  schedule,  through  a  number  of  the  more 
representative  departments  of  the  Bank.  They  return  to  college 
in  September  and  come  back  to  the  Bank  the  following  summer. 
Upon  graduation  from  college,  they  enter  the  Bank  as  permanent 
employees  and  are  then  placed  in  the  department  for  which  they 
have  shown  the  greatest  aptitude,  and  where  their  services  are 
most  needed.  Thus,  a  man  wholly  inexperienced  in  banking  is 
given  first  a  general  background,  and  then  an  opportunity  to 
specialize  in  the  line  for  which  he  is  best  fitted — credits,  collec- 
tions, auditing,  etc. 

Supplementing  the  practical  work  in  the  departments  is  a 
schedule  of  text  book  work  and  lectures  under  the  direction  of 
our  Educational  Department.  Modern  languages,  commercial 
geography,  elementary  banking,  foreign  exchange,  credits,  and 
similar  subjects  are  touched  upon.  In  this  connection  we  have 
used  the  following  books: 

Foreign  Exchange  Explained,  by  Franklin  Escher;  Foreign 
Exchange,  by  A.  C.  Whitaker;  The  Meaning  of  Money,  by  Hart- 
ley Withers;  Practical  Exporting,  by  B.  Olney  Hough;  Elemen- 
tary Course  in  Banking  Practice,  of  the  Benjamin  Franklin 
Institute;  The  Practical  Work  of  a  Bank,  by  W.  E.  Kniffin. 

During  the  period  of  training  the  men  are  paid  a  salary  which 
will  enable  them  to  live  respectably  in  the  city,  and  upon  assign- 


92         FOREIGN  TRADE  MARKETS  AND  METHODS 

ment  to  foreign  service  are  given  an  advance  for  clothing  allow- 
ance to  help  them  prepare  for  life  abroad.  A  club  house,  main- 
tained in  conjunction  with  the  activities  of  The  City  Bank  Club, 
offers  accommodations  for  members  of  the  training  class  at  a 
reasonable  figure,  in  a  convenient  location,  and  in  a  congenial 
atmosphere.  In  addition,  the  members  of  the  class  are  urged 
to  take  such  outside  educational  work  as  will  complement  their 
preparation  in  the  Bank.  The  expense  of  such  courses,  if 
approved  before  registration  by  our  Educational  Department,  is 
refunded  to  the  student  to  the  extent  of  fifty  per  cent. 

The  original  intention  of  the  training  plan  was  to  use  only 
men  of  college  education,  and,  with  few  exceptions,  this  plan  has 
been  followed  carefully.  With  the  cooperation  of  the  college 
authorities,  the  names  of  two  or  three  representative  men  from 
each  institution  are  presented  to  us  and  from  these  nominations 
are  selected  the  men  whom  we  can  accept  for  training.  Theoret- 
ically, of  course,  the  college  men  should  have  the  advantage  over 
the  man  who  has  not  had  a  college  training.  It  is  on  this  assump- 
tion that  our  organization  of  the  College  Training  Class  is  based. 
This  does  not  mean  in  any  sense  that  only  college  men  succeed 
in  the  foreign  field.  On  the  other  hand,  a  large  number  of 
representative  men  from  within  the  organization  of  the  Bank, 
who  have  not  had  college  training,  have  been  sent  into  our 
branches  and  have  given  most  satisfactory  accounts  of  them- 
selves. Usually,  however,  they  are  men  who  have  been  with  the 
Bank  for  some  little  time  and  have  had  the  advantage  of  experi- 
ence which  the  college  man  has  not  had.  Having  set  the  standard 
for  a  member  of  the  class  as  graduation  from  an  American 
college,  we  have  observed  this  condition  more  as  a  matter  of 
uniformity  than  because  we  have  found  greater  success  and 
satisfaction  from  this  class  of  students.  In  preparing  men  to 
take  places  of  responsibility  abroad,  we  have  found  that  the  only 
practicable  way  is  to  put  a  man  on  the  same  kind  of  a  job  in 
the  Home  Office  that  he  is  expected  to  fill  or  supervise  abroad, 
and  to  increase  his  capacity  by  letting  him  solve  here,  under 
capable  supervision,  the  same  kind  of  problems  that  he  will  be 
called  on  to  solve  later.  A  well  trained  mind,  good  address,  and 
a  forceful  and  pleasing  personality  are  essential  to  his  success. 
These  attributes,  however,  are  more  the  result  of  a  man's  own 
application  and  endeavor  for  improvement  than  the  means  which 
are  placed  within  his  reach  by  way  of  better  fitting  him  for 
responsibility. 


TRAINING  FOR  FOREIGN  COMMERCE  93 

Packard  Motor  Car  Company,  Detroit,  Mich. 

We  have  found  it  difficult  to  secure  suitable  traveling  repre- 
sentatives for  foreign  work.  Considerable  experience  in  our 
industry,  and  particularly  a  wide  familiarity  with  our  own 
products  and  methods  are  essential.  And  we  have  not  found  that 
anything  can  take  the  place  of  this  experience,  not  even  a  college 
training,  as  much  as  we  value  that. 

I  am  of  the  opinion  that  actual  experience  abroad,  following 
thorough  American  training  in  business  practice,  with  such  addi- 
tional technical  or  special  knowledge  as  may  be  requisite,  will 
be  found  the  most  satisfactoiy  means  ''for  fitting  men  to  take 
responsible  trade  positions  abroad." 

The  Texas  Company,  New  York  City. 

In  the  matter  of  training  our  employees  for  work  in  foreign 
countries  we  have  worked  out  our  own  course,  consisting  of 
theoretical  instruction  and  practical  application.  We  have  found 
that  books  help  some,  but  we  rely  chiefly  on  training  the  men 
after  they  arrive  in  a  foreign  country  in  the  spirit  of  that 
country  and  in  our  methods. 

Due  to  his  larger  training  we  prefer  the  college  man,  if  he  is 
the  right  man. 

A  man  must  have  a  clearly  defined  conception  of  his  future 
career  governed  by  common  sense.  He  should  have  a  willingness 
to  begin  with  small  things  and  minding  his  own  business  until 
progressively  his  opportunity  has  come.  He  cannot  be  'fitted' 
over  night.    Determination  will  always  tell  the  tale. 

The  firm  must  choose  the  right  man,  or  unhesitatingly  eliminate 
the  wrong  one.  It  is  important  for  the  firm  to  make  the  employee 
feel  that  he  is  wanted,  to  give  him  a  training  through  books  and 
practice,  and,  if  he  deserves  it,  to  let  him  feel  that  he  is  trusted. 

Burroughs  Adding  Machine  Company,  Detroit,  Mich. 

Our  organization  is  divided  into  two  units,  viz.:  sales  and 
service.  We  have,  in  addition  to  our  various  subsidiary  com- 
panies abroad,  a  great  number  of  sales  agents  and  dealers  situated 
in  all  parts  of  the  world.  Our  subsidiary  companies  are  usually 
managed  by  men  who  have  seen  years  of  active  service  in  the 
domestic  organization  and  who  are  in  our  judgment  peculiarly 
fitted  to  apply  to  the  countries  which  their  operations  cover  the 
methods  in  use  here  in  the  United  States. 

Quite  often  we  have  calls  from  our  different  dealers  to  supply 


94         FOREIGN  TRADE  MARKETS  AND  METHODS 

them  with  trained  Burroughs  salesmen  as  well  as  mechanical 
men.  For  some  time  we  endeavored  to  operate  a  sales  school  here 
at  the  home  office  to  which  our  different  dealers  could  send  their 
salesmen  for  more  advanced  instruction.  This  has  been  tried 
for  a  number  of  years  and  it  was  finally  found  that  results  were 
not  commensurate  with  the  cost  and  this  policy  has  therefore 
been  discontinued. 

It  is  very  difficult  indeed  to  endeavor  to  train  a  salesman  for 
work  in  the  field  unless  he  has  already  been  in  the  marketing  end 
of  our  business  and  knows  salesmanship  as  well  as  the  different 
policies  of  the  Burroughs  Company.  The  only  exceptions  we 
make  to  this  rule  of  accepting  men  for  sales  training  at  the 
present  time  is  in  giving  them  more  advanced  information  regard- 
ing our  newer  models  of  machines. 

On  account  of  the  service  which  we  endeavor  to  render  our 
customers  in  all  parts  of  the  world,  we  maintain  a  mechanical 
school  here  at  the  factory  which  is  open  to  members  of  our 
different  foreign  organizations  which  are  already  actively  engaged 
in  Burroughs  work.  In  the  event  a  foreign  agent  cares  to  send 
one  or  more  men  to  the  factory  for  mechanical  training,  he  pays 
their  transportation  to  Detroit  and  return,  and  during  the  course 
of  training  which  takes  from  three  to  six  months,  we  pay  these 
students  a  living  expense  of  $25.00  a  week. 

There  is  no  particular  class  of  men  from  which  we  recruit 
our  people  who  are  to  be  sent  to  different  agencies  abroad  for 
sales  work.  "We  have  a  set  policy  that  we  will  send  abroad  only 
men  chosen  from  our  domestic  organization  who  have  made  good 
records  and  have  had  a  number  of  years  experience  in  the  market- 
ing of  Burroughs  machines  here  in  the  United  States.  Our 
organization  is  so  large  (at  the  present  time  consisting  of  approxi- 
mately 2000  salesmen)  that  there  is  hardly  a  nationality  which 
is  not  represented  within  its  ranks.  It  is  our  conclusion  that 
these  men  prove  a  great  deal  more  successful  than  those,  regard- 
less of  whether  they  have  had  college  training,  who  ai-e  not  in 
possession  of  experience  in  selling  Burroughs  machines  here  in 
the  States. 

As  far  as  our  particular  business  is  concerned,  we  will  say  that 
we  consider  the  most  likely  timber  for  field  or  sales  work  abroad 
to  be  men  who  have  proven  successful  in  this  country.  Human 
nature  is  the  same  the  world  over.  People  in  China  or  South 
Africa  can  be  sold  Burroughs  machines  if  the  proper  psychologi- 
cal contact  can  be  secured.     Even  the  typical  American  sales- 


TRAINING  FOR  FOREIGN  COMMERCE  95 

man,  filled  with  "pep  and  ego,"  can  prove  successful  in  other  coun- 
tries if  be  qualifies  for  his  work,  studies  the  people,  and  in  fact  if 
'when  in  Rome  he  does  as  the  Romans  do.'  It  has  been  my  good 
fortune  to  spend  three  years  in  the  Far  East  for  this  Company. 
My  experience  previous  to  going  to  China,  Japan  and  the 
Philippines,  was  gleaned  from  years  of  work  and  study  in  the 
domestic  organization.  I  found  that  to  sell  the  Chinese,  different 
sales  talks  were  of  course  necessary,  but  by  close  application 
and  study  of  their  needs,  peculiarities,  and  in  fact,  their  entire 
life,  it  was  simply  a  matter  of  human  nature  after  all,  and  that 
in  order  to  be  successful  in  selling  in  those  countries  one  had 
only  to  obtain  the  proper  contact. 

i 

University  op  Virginia,  University,  Va. 

Our  experience  in  training  men  for  foreign  trade  has  been 
confined  to  preparing  them  for  service  in  Latin  America.  Our 
resources  here  have  not  been  great  enough  to  permit  us  to  take 
in  other  fields. 

The  principle  upon  which  we  have  based  our  work  is,  that  men 
who  are  to  go  to  Latin  American  countries  should,  first  of  all, 
possess  such  temperament,  or  personality  as  will  enable  them  to 
get  along  with  the  Latin-Americans.  In  my  judgment,  a  man's 
ultimate  success  will  depend  more  upon  this  factor  than  anything 
else  in  this  field. 

A  tborough  speaking  knowledge  of  Spanish  or  Portuguese  is 
essential,  with  French,  if  possible.  Most  of  the  men  I  have 
been  able  to  send  out  have  spoken  both  languages — that  is, 
Spanish  and  French  or  Portuguese  and  French. 

Such  men  should  have  a  thorough  knowledge  of  geography, 
social  conditions,  and  general  history  of  the  region.  In  addition 
to  these,  I  try  to  induce  them  to  study  the  literature  and  current 
political  conditions  as  well. 

These  men  should  have  a  thorough  training  in  Latin  American 
business  methods,  trade  routes,  transportation,  packing,  and  the 
Hke. 

When  the  four  essentials  enumerated  are  based  upon  a  good 
general  education,  in  which  the  theory  of  economics,  and  coursed 
on  money  and  banking,  foreign  exchange,  and  the  like,  are  in- 
cluded, the  men  who  complete  the  work  as  suggested  are  ready 
to  start. 

It  has  always  been  my  aim  to  give  my  students  such  knowledge 
of  the  conditions,  the  peculiarities  of  business  as  it  is  conducted 


96         FOREIGN  TRADE  MARKETS  AND  METHODS 

in  Latin  America,  that  they  will  be  able  rapidly  to  work  up  to 
executive  positions  and  take  their  places  among  the  commercial 
diplomats  that  we  need  so  badly. 

In  giving  this  training,  I  have  so  arranged  my  courses  in 
Spanish  as  to  give  my  students  a  very  considerable  amount  of 
information  about  Latin  America  while  teaching  them  to  speak 
the  language.  And  I  also  give  a  general  course  on  Latin  America, 
which  includes  detailed  geography,  history,  social  conditions, 
political  conditions,  and  trade  relations,  both  internal  and 
external. 

It  will  doubtless  be  of  interest  to  you  to  know  that  your  own 
book.  Understanding  South  America,  is  one  of  my  stand-bys, 
and  is  constantly  used  as  a  reference  work  in  my  course  on  Latin 
America.  Enoch's  Republics  of  South  and  Central  America, 
Sweet's  History  of  Latin  America,  Aughinbaugh's  Selling  Latin 
America,  Pepper's  American  Foreign  Trade,  and  the  various 
standard  works  on  separate  countries  are  also  used. 

During  the  past  few  years,  I  have  consistently  adhered  to 
the  practice  of  discouraging  all  students  who  apply  to  me  for 
training  for  the  Latin  American  field,  unless  I  am  convinced  that 
they  have  the  temperament  and  personality  that  will  enable  them 
to  live  in  harmony  with  the  Latin  Americans.  The  result  is  that 
about  two  out  of  every  ten  students  thus  applying  'pass'  my 
inspection  and  tests.  I  believe  that  this  is  the  only  fair  way  to 
approach  the  problem,  and  I  believe  that  my  method  is  justified 
by  the  results.  Every  man  I  have  recommended  so  far  has  made 
good. 

As  I  suggested,  our  resources  here  do  not  yet  allow  us  to  do 
all  we  should  like  to  do.  Like  most  state  institutions,  we  lack 
funds,  and  cannot  give  all  the  courses  that  should  be  given. 
We  hope,  however,  in  the  near  future,  to  be  able  to  expand  our 
courses,  especially  in  geography,  foreign  trade  methods,  and 
international  exchange.  We  shall,  in  all  probability,  continue  to 
put  most  stress  on  preparing  men  for  the  Latin  American  field 
• — which  is,  of  course,  one  of  the  most  vital  as  well  as  most 
difficult  of  all. 

Syracuse  University,  Syracuse,  New  YorTc. 

Some  of  the  larger  colleges  are  doing  effective  work  in  train- 
ing students  for  foreign  commerce  by  offering  courses  dealing 
not  only  with  the  broader  aspects  of  foreign  trade  and  com- 
mercial  policy,  but  with  the   essentials  of  practical  exporting 


^  TRAINING  FOR  FOREIGN  COMMERCE  97 

from  the  point  of  view  of  the  American  manufacturer  desirous 
of  extending  his  foreign  markets.  A  few  Y.  M.  C.  A.  classes  in 
foreign  trade  are  also  doing  excellent  work. 

Books  we  have  found  helpful  in  foreign  trade  training  are: 
Hough,  Practical  Exporting;  Savay,  Principles  of  Foreign  Trade; 
Ford,  The  Foreign  Trade  of  the  United  States;  Selling  in  Foreign 
Markets,  Bulletin  No.  81  Miscellaneous  Series,  Bureau  of  Foreign 
and  Domestic  Commerce. 

Particular  schools,  where  the  instruction  in  training  men  for 
overseas  trade  is  cooperating  with  business  houses  engaged  in 
foreign  commerce,  are  Boston  University,  New  York  Univei"sity, 
Columbia  University,  and  Tulane  University  at  New  Orleans. 
Such  cooperation  is  also  being  furthered  at  the  University  of 
Chicago  and  in  the  College  of  Business  Administration  at 
Syracuse  University. 

We  believe  some  of  the  most  vital  subjects  in  training  for 
foreign  trade  are:  Commercial  and  Industrial  Geography, 
Marketing  (including  Advertising  and  Salesmanship),  the  princi- 
ples of  business  organization  and  administration,  the  commercial 
policies  of  the  various  nations — special  attention  to  tariffs,  com- 
mercial treaties,  and  shipping  policies,  and  Political  Science, 
dealing  especially  with  the  diplomatic  and  consular  service. 

In  our  foreign  trade  at  Syracuse  University,  we  are  emphasiz- 
ing four  rather  distinct,  and  yet  necessarily  correlated  features: 
1.  A  course  in  governmental,  commercial  policies  with  special 
reference  to  relation  of  those  policies  to  actual  importing 
and  exporting:  the  tariffs,  treaties,  systems  of  public  trade 
promotion,  etc. — in  short,  the  entire  environment  that  the 
government  builds  up  around  the  trade  of  its  people.  This 
is  followed  by  a  consideration  of  practical  exporting  and 
importing  dealing  in  detail  with  the  four  grand  divisions 
of  such  trade : 

a.  The  study  of  foreign  markets,  the  purchasing  power, 
demands,  and  trading  customs  of  the  people,  the  strength, 
resources  and  methods  of  foreign  competitors  in  those 
markets. 

b.  The  suitable  means  of  reaching  various  markets;  through 
direct  selling,  commission  houses,  combination  agents,  etc, 

e.   The  means  of  trade  development;  the  use  of  advertising, 

correspondence  and  traveling  salesmen. 
d.    The  technical  elements  involved  in  handling  export  orders : 

financing,  insurance,  and  other  documentary  work. 


98         FOREIGN  TRADE  MARKETS  AND  METHODS 

2.  Following  the  rather  broad  course  just  outlined,  the  student 
specializes  as  thorouglily  as  time  will  permit  on  a  par- 
ticular phase  of  foreign  trade,  dealing  with  the  marketing 
of  a  special  product  in  a  limited  trade  area. 

3.  An  attempt  is  made  to  secure  the  best  available  informa- 
tion on  such  subjects  mentioned  above  from  local  business 
selling  abroad. 

4.  A  final  step  is  to  be  the  encouragement  of  students  to  under- 
take work  during  the  summer  with  the  export  departments 
of  various  businesses  as  a  proper  supplement  to  such  train- 
ing as  we  are  attempting  here. 

The  National  Cash  Register  Company,  Dayton,  Ohio. 

We  have  our  own  Branch  Offices  or  Agencies  in  most  foreign 
countries.  Our  men,  therefore,  are  trained  locally  in  most  in- 
stances. In  recent  years  we  have  had  very  few  men  coming 
to  the  factory  for  training.  Instead,  we  have  Field  Instructors, 
who  are  in  constant  touch  with  the  factory,  visiting  the  Agencies 
and  helping  local  agents'  to  train  their  men.  Very  often,  when 
a  new  man  employed  by  one  of  our  agents,  shows  that  he  has 
the  qualifications  of  a  good  salesmen,  he  is  sent  to  one  of  our 
branch  offices  for  the  purpose  of  spending  some  time  in  the  field 
with  our  experienced  men.  In  this  way  his  natural  selling  ability 
is  developed  in  actual  practice,  and  he  receives  the  benefit  of 
the  experience  of  the  older  man. 

We  hold  frequent  schools  for  salesmen.  This  is  done  not  only 
in  our  domestic  field,  but  also  in  our  foreign  field.  For  this 
purpose  we  have  prepai'ed  a  manual  for  salesmen,  which  is 
revised  from  time  to  time.  This  has  the  principles  which  have 
proved  to  be  successful  in  our  business.  We  also  have  outlined 
in  a  pamphlet  the  fundamentals  to  be  followed  in  employing  and 
training  salesmen.  As  a  complement  to  this  we  have  a  pamphlet 
outlining  a  course  of  study  for  new  salesmen,  and  another  one 
outlining  programs  for  conventions  of  older  salesmen. 

We  use  no  special  book  or  books  as  reference.  Our  manual 
is  made  up  of  ideas  gathered  from  all  sources,  but  principally 
from  the  experience  of  our  most  successful  salesmen.  We  naturally 
recommend  that  our  men  read  good  selling  literature  and  keep 
abreas't  of  the  times. 

The  matter  of  remuneration  during  the  period  of  training 
depends  on  the  nature  of  the  man's  position.  For  instance,  if 
we  take  a  man  from  our  office  force  and  put  him  through  a 


TRAINING  FOR  FOREIGN  COMMERCE  99 

course  of  salesmanship  study,  his  salary  as  an  office  man  continues 
during  the  period.  On  the  other  hand,  if  the  man  to  receive 
training  comes  from  the  outside,  we  test  his  interest  in  our 
proposition  by  making  him  sacrifice  something.  Usually  he  is 
paid  no  salary,  other  than  to  cover  his  Uving  expenses  while 
attending  the  course.  In  this  way  the  student  feels  that  he  is 
losing  what  he  might  have  otherwise  saved  in  his  former  position. 
This  fact  makes  him  feel  his  responsibility  in  his  new  under- 
taking. 

The  above  is  also  true  of  the  men  who  are  from  time  to  time 
sent  from  the  foreign  field  to  our  factory  to  take  a  regular  repair 
eoui'se.  Such  men  are  paid  a  salary  sufficient  to  keep  them 
comfortably  located. 

When  a  man  is  going  from  the  factory  to  the  foreign  field, 
either  as  a  salesman  or  as  manager  or  assistant  manager,  he  is 
given  the  opportunity  to  visit  two  or  three  of  the  principal 
cities  in  the  United  States  where  we  have  Company  offices.  This 
is  done  for  the  purpose  of  giving  the  man  the  benefit  of  the 
education  which  comes  from  traveling,  and  also  to  give  him  the 
opportunity  of  personally  seeing  how  our  most  successful  offices 
are  actually  conducted.  His  salary  and  traveling  expenses  while 
on  these  educational  trips  are  paid  by  the  Company. 

Besides  the  salesmen  and  employees  who  come  to  our  factory 
or  to  foreign  branch  offices  for  training,  we  frequently  have 
agents  or  their  salesmen  and  employees  who  come  to  our  factoiy 
or  branch  offices  merely  for  a  visit.  These  visits  may  be  for  one 
or  two  weeks,  or  merely  for  two  or  three  days.  In  such  instances, 
of  course,  they  do  not  receive  any  special  training,  and  naturally 
do  not  remain  with  us  long  enough  to  be  placed  on  the  Company's 
pay  roll.  They,  therefore,  receive  no  remuneration,  but  the 
Company  always  pays  their  hotel  expenses  while  in  Dayton,  or 
at  the  city  where  the  Company  office  may  be  located. 

We  do  not  recruit  our  salesmen  from  any  particular  class  of 
men.  Specialty  salesmen,  however,  are  usually  the  men  who  have 
the  qualifications  necessary  for  our  business.  Men  who  have  been 
in  business  for  themselves,  and  especially  clerks  in  retail  stores, 
also  offer  good  material  for  our  business.  Another  good  field  for 
recruiting  salesmen  is  found  by  us  in  the  men  who  have  been  in 
our  factoiy  or  offices  for  some  time,  as  they  know  our  business 
and  are  well  acquainted  with  the  Company's  ideas  and  policies. 

The  man  with  a  college  education  and  the  man  with  a  high 
school  education  have  the  same  chances  for  success  in  our  busi- 


100       FOREIGN  TRADE  MARKETS  AND  METHODS 

ness.  A  thorough  knowledge  of  the  business,  gained  m  practice, 
and  knowledge  of  the  language  of  the  country  where  the  man 
is  to  be  located,  is  the  best  education  he  can  have.  There  is  no 
reason  why  a  man  without  a  college  education  cannot  be  well 
read,  polished  and  up-to-date.  Without  these  qualifications  he  is 
not  fit  for  foreign  work.  It  is  not  so  much  a  man's  theoretical 
or  school  education,  as  his  actual  experience  and  knowledge  of 
business,  that  counts. 

In  fitting  men  to  take  responsible  positions  in  the  foreign  field, 
we  have  always  borne  in  mind  the  following  points : 

1.  Knowledge  of  the  language. 

2.  Actual  work  in  the  Foreign  Department  of  our  factory, 
to  familiarize  the  man  with  foreign  business  methods,  cor- 
respondence, literature,  newspapers  and  the  like. 

3.  Study  of  the  article  from  a  mechanical  standpoint  at  factory. 
Whether  this  study  is  to  be  elementary  or  thorough,  depends 
on  the  nature  of  the  position.  A  salesman  does  not  require 
as  much  mechanical  knowledge  as  a  repairman. 

4.  Actual  practice  in  the  foreign  field  in  company  of  local 
experienced  and  successful  salesmen  of  our  branches.  Thia 
is  to  familiarize  the  new  man  with  local  business  methods, 
prices,  and  tenns.  All  men  receive  a  course  in  selling 
instruction  before  they  leave  the  factory. 


CHAPTER  VI 

LITERATURE   AND  STUDY  COURSES    FOR  FOREIGN 
TRADE    REPRESENTATIVES 

If  a  man  empties  his  purse  into  his  head,  no  man  can  take  it 
away  from  him. — Franklin. 

The  awakening  of  the  United  States  to  a  real  partici- 
pation in  foreign  commerce  has  brought  forward  a  flood 
of  literature  during  the  past  few  years.  Government 
departments  have  issued  bulletins  and  pamphlets  in  large 
numbers,  special  institutions  have  been  organized  to  assist 
foreign  traders  and  have  put  forth  all  kinds  of  pamphlet 
and  periodical  literature,  business  houses  and  banks  with 
house  organs  and  other  literature  have  added  to  the 
volume,  while  a  large  variety  of  schools  and  private  insti- 
tutions have  devoted  much  time  and  print  to  the  subject. 
As  a  consequence  the  foreign  trader  finds  himself  more 
or  less  swamped  in  a  great  sea  of  material.  It  is  the 
purpose  of  this  chapter  to  make  a  few  suggestions  relative 
to  literature  and  courses  bearing  on  world  trade. 

The  preparation  of  such  literature  has  been  attended 
by  the  difficulties  inherent  in  the  inauguration  of  any 
movement  of  such  wide  proportions.  Foreign  trade  routes 
and  national  boundaries  have  been  changed  so  rapidly  of 
late  it  has  been  difficult  for  text  books  to  keep  up  with 
the  changing  face  of  the  world.  Each  department  of 
trade,  furthermore,  has  been  enlarging  and  becoming 
more  and  more  intricate  with  every  passing  month  until 
a  considerable  amount  of  literature  is  necessary  to  cover 
any  one  special  field  like  shipping,  banking  or  export 
and  import. 

101 


102       FOREIGN  TRADE  MARKETS  AND  METHODS 

Our  schools  have  labored  under  the  difficulty  of  secur- 
ing properly  qualified  teachers.  The  teachers  in  many 
cases  have  not  had  contact  with  practical  and  experi- 
mental trade  problems  and  procedure  and  the  business 
man  who  has  been  called  in  to  lecture,  while  he  has  known 
his  specialty,  has  lacked  knowledge  of  how  to  present  his 
subject,  limiting  often  the  results.  It  would  seem  as 
though  the  successful  teacher  of  such  subjects  in  the  future 
would  be  a  man  who  has  had  some  years  of  experience 
in  the  actual  work  of  overseas  commerce,  from  which 
activity  he  has  gone  into  our  commercial  schools  and  other 
institutions  of  learning  to  devote  himself  to  teaching. 

This  would  be  in  line  with  the  instruction  which  is 
given  in  many  institutions  in  such  subjects  as  engineering 
and  commercial  and  scientific  studies.  As  one  trade 
expert  has  expressed  it,  **The  teacher  of  the  future  should 
be  a  graduate  of  the  school  of  foreign  commerce,  who, 
after  some  time  in  service  of  foreign  business,  returns  to 
teaching." 

The  subject  matter  of  foreign  trade  involves  several 
classes  or  divisions  of  study.  Among  these  may  be  con- 
sidered the  technique  and  routine  of  exporting,  in  which 
the  trader  as  a  specialist  must  be  familiar  as  any  work- 
man should  be  with  his  practical  tools.  Another  division 
would  be  the  great  commercial  areas  of  the  world  and  the 
study  of  the  markets  which  these  furnish,  while  in  a 
third  group  are  language  studies,  which  are  absolutely 
essential  for  the  foreign  trade  representative. 

It  goes  without  saying  that  the  well  equipped  foreign 
representative  must  master  some  good  and  authoritative 
literature  relative  to  sales  practice,  technical  documents, 
foreign  correspondence,  packing,  foreign  advertising, 
exporting,  ocean  transportation,  consular  procedure, 
tariffs  and  commercial  treaties.  He  will  specialize  upon 
certain  of  these  in  accordance  with  the  nature  of  his  work, 
but  will  also  do  well  to  specialize  upon  that  part  of  the 
world  in  which  his  work  is  to  be  localized. 

We  know  of  a  certain  man  who  was  told  by  one  of  the 


LITERATURE  AND  STUDY  COURSES  103 

officers  of  his  company  that  he  was  to  be  sent  in  six 
months  to  Chile.  This  was  a  challenge  to  the  man  to 
begin  immediate  study  and  preparation  and  the  result 
has  been  that  this  man  has  become  one  of  the  best  authori- 
ties on  business,  commerce  and  international  relations 
with  Chile.  Among  other  preparations  he  attended  an 
evening  school  in  the  firm  with  which  he  was  associated, 
taking  up  the  study  of  Spanish  and  two  or  three  other 
courses  in  commercial  procedure.  He  talked  with  men 
who  had  spent  years  in  the  country  and  also  achieved 
acquaintance  with  a  good  number  of  Chileans  living  in 
and  about  New  York.  He  sent  letters  to  men  actually 
on  the  ground,  asking  pertinent  questions  relative  to  the 
specialty  of  which  he  was  to  have  charge.  He  gathered 
a  small  but  valuable  library  of  books  and  literature  cov- 
ering the  history,  politics  and  commercial  evolution  of 
this  vigorous  southern  republic.  The  Bureau  of  Foreign 
and  Domestic  Commerce,  Federal  Trade  Board  for  Voca- 
tional Education,  the  Pan-American  Union,  the  United 
States  Shipping  Board  and  the  National  City  Bank  of 
New  York  were  found  to  be  soui'ces  from  which  helpful 
material  could  be  secured.  A  meeting  of  the  Foreign 
Trade  Council  and  conventions  of  Manufacturers  Associa- 
tions gave  him  the  privilege  of  getting  into  touch  with 
many  men  who  afforded  much  light  upon  his  training. 
This  man  stated  to  me  that  he  never  worked  so  hard  or 
with  such  great  interest  as  during  these  six  months  of 
preparation.  He  also  stated  that  the  time  was  insufficient, 
but  that  it  was  long  enough  to  give  him  an  idea  of  his 
field,  to  lay  the  foundation  of  his  own  personal  study 
and  to  determine  to  make  himself  a  specialist  upon 
Chilean  matters. 

The  emphasis,  moreover,  upon  language  study  both  for 
courses  and  personal  preparation  can  hardly  be  over-esti- 
mated along  with  this  subject  of  technique  and  commer- 
cial geography.  If  any  one  realizes  that  there  are  ten  or 
twelve  commercial  languages  and  that  each  one  of  these 
languages  possesses   possibly   50   trade   vocabularies,   it 


104       FOREIGN  TRADE  MARKETS  AND  METHODS 

becomes  necessary  for  the  person  to  get  his  particular 
trade  completely  in  view  before  beginning-  his  language 
study.  Of  course  the  earlier  a  man  begins  to  acquire  a 
foreign  language  the  easier  it  is  for  him  and  the  more 
rapidly  will  he  acquire  it. 

The  chief  commercial  languages  for  the  American  to 
learn  to-day  are,  Spanish,  French  and  Portuguese.  If  the 
time  is  short  for  preparation  it  is  recommended  that  the 
student  confine  himself  quite  largely  to  the  commercial  or 
utilitarian  side  of  his  language  training.  Language  for  the 
foreign  trader  is  an  advantage  for  business,  and  is 
primarily  for  vocational  use,  but  no  man  will  study 
seriously  any  foreign  language  without  securing  a  culture 
together  with  a  knowledge  of  literature  and  history  which 
will  be  of  inestimable  value  to  him.  As  soon  as  he 
begins  to  turn  the  corner  of  facility  in  speaking  the 
language  and  recognizing  the  familiar  sounds  there  will 
dawn  upon  him  something  of  the  delight  which  comes 
from  learning  a  nation's  spirit,  moods  and  temperamental 
reactions,  and  if  he  is  wise  he  will  devote  many  a  spare 
hour  to  devouring  books  in  the  native  language  which  will 
aid  in  giving  him  the  atmosphere  of  the  country  and  the 
temper  of  the  people  with  whom  he  is  to  work. 

Among  the  places  found  convenient  for  teaching  sub- 
jects of  foreign  trade  are  night  schools,  extension  depart- 
ments of  our  colleges,  high  schools  and  through  the  regular 
studies  of  commercial  and  technical  institutions. 

It  must  be  kept  in  mind  that  there  are  two  classes  of 
men  to  be  trained,  men  who  are  to  stay  at  home  as  well  as 
those  who  are  to  go  upon  overeeas  duty.  Wherever  the 
student  begins  and  continues  his  study,  care  must  be  taken 
that  he  be  trained  particularly  for  the  work  and  the  country 
in  which  he  is  to  be  engaged,  since  methods  and  customs 
vary  so  greatly  that  one  man  can  hardly  master  the  details 
of  foreign  trade  in  every  port  of  the  world. 

The  results  which  have  already  been  obtained  by  a  few 
business  and  banking  institutions,  notably  the  National 
City  Bank  of  New  York,  in  training  courses  for  prospective 


LITERATURE  AND  STUDY  COURSES  105 

foreign  bankers  and  traders  suggest  the  valuable  opportuni- 
ties offered  by  large  firms  to  train  their  employees  while 
in  the  midst  of  their  actual  contact  with  the  field. 

The  head  of  a  business  firm  may  well  insist  that  certain 
of  their  employees  have  the  facilities  necessary  to  fit  them 
for  special  positions  and  the  designation  of  such  em- 
ployees will  add  dignity  and  a  sense  of  obligation  to  the 
employee.  Such  studies  should  be  considered  as  a  part  of 
the  work  of  the  firm  and  the  attendance  upon  the  meetings 
and  the  quality  of  the  work  done  should  figure  in  the 
reports  to  the  business  house  from  time  to  time. 

In  some  cases  the  firm  has  refunded  tuition  fees  to  the 
students  who  have  devoted  themselves  successfully  in  out- 
side classes  in  preparing  for  their  special  lines  of  business. 

As  an  example  of  some  of  the  courses  which  are  being 
presented  in  one  large  foreign  trade  firm  are  the  following 
groups  of  study : 

Elementary  and  advanced     Talks  on  Accounting 

Spanish  Talks  to  Junior  Clerks 

Commercial  Geography  Speed  Stenography 

The  selecting  of  teachers  for  such  courses  is  an  important 
one.  The  instructors  are  often  taken  from  high  schools  of 
commerce  or  technical  institutions  located  near  the  busi- 
ness house.  Lectures  are  given,  usually  by  members  of 
the  firm  on  different  topics. 

The  following  course  of  lectures  is  scheduled  for  one 
New  York  business  house  dealing  in  foreign  affairs: 

Export  Accounts  Foreign  Accounts 

Produce  Accounts  Branch  House  Accounts 

Control  Position  Cashier's  Books,  etc. 

Auditing  Outward  Shipments 

Agencies  Accounts  Resume  and  Concluding  Talk 

We  should  like  to  commend  the  plan  of  a  definite  arrange- 
ment entered  into  by  a  business  house  with  students  to 
work  out  of  business  hours  or  during  the  summer  vacation, 
training  themselves  for  their  vocations.    The  National  City 


106       FOREIGN  TRADE  MARKETS  AND  METHODS 

Bank  has  been  very  successful  in  taking  college  students 
and  preparing  them  for  useful  careers,  both  for  banking 
in  the  United  States  and  in  the  branch  offices  of  this  institu- 
tion abroad.  More  and  more  students  are  coming  to  busi- 
ness houses  to  begin  work  in  which  they  may  fit  them- 
selves for  posts  abroad. 

This  vacation  work  in  a  business  house  is  invaluable  to 
the  student  who  intends  to  engage  in  foreign  commerce 
and  points  him  to  the  kind  of  training  which  should  occupy 
his  constant  thought  while  still  at  school. 

As  to  the  length  of  time  for  courses  of  study  which  are 
intended  to  fit  a  man  properly  for  overseas  trade,  it  depends 
entirely  upon  the  man  and  the  amount  of  work  he  can  do 
outside.  Six  months  or  a  year,  however,  of  more  or  less 
steady  application  are  required  to  give  a  breadth  of  knowl- 
edge sufficient  for  a  background  for  foreign  trade  training. 
Much  of  the  particular  training  will  be  given  to  the 
student  in  the  actual  business  when  he  is  sent  abroad  to 
a  branch  house  by  the  home  firm. 

Courses  for  Salesmen. — There  is  no  subject  of  more  vital 
importance  to  the  manufacturer  or  exporter  than  that  of 
finding  a  market  for  his  goods  abroad.  The  sales  course 
naturally  includes  not  only  the  actual  technique  involved, 
but  as  well,  a  clear  understanding  of  the  various  trade 
channels  used  in  overseas  trade. 

The  student  in  this  course  should  be  acquainted  with  the 
various  selling  methods  used  by  different  classes  of  Ameri- 
can exporters.  The  instnictor  in  this  course  should  be 
able  to  furnish  readings  as  well  as  give  opportunities  for 
discussion  of  these  problems  and  we  are  suggesting  the 
main  headings  for  an  outline  of  this  course,  prepared  by 
the  Department  of  Commerce  at  "Washington : 

1.  Survey  of  sales  problems. 

2.  Study  of  the  market. 

3.  Direct  sales  problems. 

4.  The  export  middleman. 

5.  Agents  and  agencies. 

6.  Traveling  salesmen. 


LITERATURE  AND  STUDY  COURSES  107 

7.  Correspondence,  catalogues  and  advertising. 

8.  Export  combinations. 

9.  A  contrast  of  markets  for  American  hardware. 

10.  Factors  affecting  marketing  of  electrical  goods. 

11.  Miscellaneous  sales  factors. 

12.  Terms  of  payment. 

13.  Terms  of  delivery. 

14.  Tendencies  in  economic  reconstruction. 

15.  Export  trade  aids.  i 

Dr.  Guy  Edward  Snider  has  prepared  under  the  direc- 
tion of  the  Bureau  of  Foreign  and  Domestic  Commerce 
and  the  Federal  Board  for  Vocational  Education,  certain 
material  for  use  in  a  course  as  suggested  above  and  his 
book  on  Selling  in  Foreign  Markets,  Miscellaneous  Series 
No.  81,  may  be  purchased  from  the  Superintendent  of 
Documents,  Government  Printing  Office,  Washington, 
D.  C,  for  50  cents. 

The  following  book  references  relative  to  sales  practice 
will  be  found  of  use  to  those  who  wish  to  specialize  in  this 
vital  department: 

Exporting  to  Latin  America,  by  Filsinger.  (D.  Appleton  & 

Company). 
Latin  American  Yearbook  for  Investors  and  Merclmnts. 
Principles  of  Foreign  Trade,  by  Savay.    Ronald  Press. 
Encyclopedia  of  Latin  America,  Wilcox  &  Rines. 
Direct  Exporting,  by  Wyman  (Business  Training  Coi"pora- 

tion  set). 
Practical  Exporting,  by  Hough. 
Foreign  Trade  Books,  edited  by  Dr.  E.  E.  Pratt  (Business 

Training  Corporation). 
American  Methods  in  Foreign  Trade,  by  Vedder. 

Foreign  Advertising  Courses. — ^We  have  presented  in  an- 
other chapter  certain  general  suggestions  and  conditions 
relative  to  foreign  trade  advertising,  but  the  following  out- 
line furnished  by  the  Bureau  of  Foreign  and  Domestic 
Commerce  will  be  found  useful  by  those  who  desire  to 
study  advertising  principles  and  policies  in  groups : 


108       FOREIGN  TRADE  MARKETS  AND  METHODS 

1.  Survey  or  the  Field  : 

A  close  study  of  the  field  to  be  covered  by  the  advertis- 
ing campaign  must  be  made  from  the  viewpoint  of  the 
advertiser.  The  knowledge  of  the  general  conditions  of  the 
field  in  question  is  necessary  as  a  background.  In  addition 
to  this  general  knowledge,  such  matters  as  the  following 
must  be  considered  from  the  advertising  viewpoint:  (1) 
Racial  characteristics.  (2)  Pride  and  prejudices.  (3) 
General  national  psychology.  (4)  Seasons.  (5)  Climate. 
(6)  Currency.  (7)  Metric  system.  (8)  Distances  between 
consumer  and  seller,  etc. 

Three  points  in  particular  are  outstanding:  (1)  Purchas- 
ing power.  (2)  Literacy.  (3)  Percentage  of  urban  and 
rural  populations. 

2.  Local  Advertising  Practice: 

The  state  of  advertising  in  the  country  under  consideration 
and  in  the  locality  to  be  reached: 
Consumer  advertising. 
Dealer  advertising,  and  assisting  the  dealer. 

3.  Newspaper  Media: 

Great  dailies: 

Morning  papers. 

Evening  papers. 

Sunday  editions. 
Secondary  papers. 
Small  sheets  (local  papers). 
Weeklies. 

Monthly  magazines. 
Their  appearance,  character,  influence,  circulation,  clientele, 

size,  quality  of  paper,   general  appearance,  and  other 

characteristics. 
Individual  experience  of  advertisers. 

4.  Copy: 

Copy  in  regard  to  localisms. 
Dangers'  of  the  "direct  command." 
Dangers   of   translations. 
Custom  of  the  country  regarding  fixed  prices. 
Illustrations  and  engraving. 

Commercial  artists,  their  quality,  remuneration,  etc. 
Duties   and  formalities  in  sending  plates  or  cliches  pre- 
paid. 


LITERATURE  AND  STUDY  COURSES  109 

5.  Advertising  Rates: 

Local  and  foreign  rates. 

Differences    of    opinion    between    foreign    publishers    and 

American  advertisers. 
Details  of  contract  for  advertising  and  the  fulfillment  of 

contracts. 

6.  Advertising  Agencies: 

Foreign  advertising  agencies. 
Publishers'   agents. 
Standards  of  practice,  if  any. 
The  local  situation. 

Advertising  agencies  in  the  United  States. 
Need  of  cooperation  for  united  effort  in   foreign   fields. 
(The  general  function  of  the  advertising  agency  should  be 
entered  into  here.) 

7.  Public  Conveyances: 

Street-car,  subway  and  other  public-conveyance  advertising. 

Kinds  of  posters  and  cards  displayed. 

Sizes  of  cards  or  posters. 

Location. 

Uniformity  of  frame  or  board,  or  lack  of  uniformity. 

8.  Outdoor  Advertising: 

Railway  station  advertising. 

Handbills. 

Posters  on  walls. 

Billboards'. 

Regulations  governing  pasting  of  bills,  if  any. 

Electric  signs. 

Novelties. 

Use  of  novelties,  calendars,  and  other  specialties. 

9.  Trade-marks  and  Copyrights: 

The  necessity  of  protecting  trade-marks  and  copyrights  in 

foreign  countries. 
International  Trade-mark  Bureau  of  Havana. 
Methods  of  procuring  trade-marks  and  copyrights. 
10.  Direct-by- mail  Methods: 

Preparation  of  sales  letters. 
Postage. 

Duties  on  letters  or  catalogues  in  bulk. 
Use  of  parcel  post. 
Use  of  form  lettei-s. 
Directories  and  mailing  lists. 


no       FOREIGN  TRADE  MARI^TS  AND  METHODS 

11.  Catalogues: 

The  foreign  language  eatalognie. 
The  necessity  of  care  to  assure  expert  translations. 
Polyglot  of  many  catalogues. 
Bi-lingual  catalogues. 

The  poUey  of  printing  prices  in  the  catalogue,  and  other 
details  of  this  nature. 

12.  American'  Export  Tru:Vde  Journals  as  Media.     (See  par- 

ticularly Cuban  Reports.) 

13.  Motion  Pictures: 

Industi'ial  films. 

The  possibility  of  this  development.     ' 

The  extent  of  the  use  of  motion-picture  houses,  the  nature 

of  films  shown,  and  the  extent  of  the  use  of  educational 

films  in  schools,  churches,  lodges. 
Motion  pictures,  as  an  outside  or  open-air  media. 

Although  there  seems  to  be  no  adequate  book  dealing 
with  foreign  trade  advertising  there  is  considerable  material 
to  be  found  in  the  following  publications : 

Advertising   and   Selling   Practice,   by    Opdycke.        A.   W. 

Shaw  Co. 
Advertising  Campaigtis,  by  Martin.     Alexander  Hamilton 

Institute. 
Advertising  Principles,  by  De  Bower.    Alexander  Hamilton 

Institute. 

Those  interested  in  the  subject  will  be  helped  by  reports 
of  Mr.  J.  W.  Sanger,  trade  commissioner  of  the  U.  S. 
Bureau  of  Foreign  and  Domestic  Commerce  relative  to 
advertising  in  particular  countries  like  Cuba,  Chile,  Peru, 
Bolivia,  Argentina,  Uruguay,  Brazil  and  the  Far  East. 

Those  who  are  interested  to  get  outline  for  either  in- 
dividual or  course  of  study  on  other  topics  related  to 
foreign  commerce  might  get  suggestions  by  reading  the 
book  entitled  Training  for  Foreign  Trade,  Miscellaneous 
Series  No.  97,  by  R.  S.  MacElwee  and  F.  G.  Nichols.  This 
book  may  be  had  for  15  cents  from  the  Superintendent  of 
Documents,  Government  Printing  Office,  "Washington, 
D.  C. 


LITERATURE  AND  STUDY  COURSES  111 


SUGGESTED  LIST  OF  BOOKS  HELPFUL  IN  TRAINING 
FOR  FOREIGN  COMMERCE 

South  America: 

Adams^  Frederick  Upham:  Conquest  of  the  Tropics.     (New 

York,  1914,  Doubleday  Page  &  Co.) 
AuGHiNBAUGH,  W.  E. :  Selling  Latin  America.  (Boston,  1915. 

Small  Maynard  &  Co.) 
Bingham,  Hiram:  Across  South  America.     (New  York,  1911, 

Houghton,  Mifflin  Co.) 
Bryce,  James:  South  America:  Impressions  and  Observations. 

(New  York,  1917,  Macmillan  Co.) 
Collins,  James  H.  :   Straight  Business  in    South    America. 

(New  York,  1920,  D.  Appleton  and  Co.) 
Cooper,  Clayton  Sedgwick:   Understanding  South  America. 

(New  York,  1918,  George  H.  Doran  Co.) 
Enock,  C.  R.  :  The  Republics  of  South  and  Central  America. 

(New  York,  1913,  C.  Scribner's  Sons.) 
Ford,  Isaac  N.:    Tropical  America.      (New   York,   1893,  C. 

Scribner's  Sons.) 
Garcia,  Caldron,  F.  :  Latin  America:  Its  Rise  and  Progress. 

(New  York,  1913,  C.  Scribner's  Sons.) 
Goldsmith,  P.  H.  :  J.  Brief  Bibliography  of  Books  in  English, 

Spanish  and  Portuguese,  relating  to  the  Republics  commonly 

called  Latin  America,  with  comments.     (New  York,  1915, 

Macmillan  Co.) 
Hirst,  W.  A.:  A  Guide  to  South  America.     (New  York,  1915, 

Macmillan  Co.) 
Jones,   Chester  Lloyd:   Caribbean  Interests   of  the   United 

States.     (New  York,  1916,  D.  Appleton  &  Co.) 
Koebel,  W.  H.  :  South  America.     (London,  1918,  T.  Fislier 

Unwin.) 
— British  Exploits  in  South  America.     (New  York,  1917,  Cen- 
tury Co.) 
Latane,  John  H.  :   The  Diplomatic  Relations  of  the  United 

States  and  Spanish  America.     (Baltimore,  1900,  Johns  Hop- 
kins Press.) 
Moore,  John  Bassett:  American  Diplomacy:  Its  Spirit  and 

Achievements. 
MozANS,  H.  J.:   Up   the  Orinoco  and  Down  the  Magdalena. 

(New  York,  1910,  D.  Appleton  &  Co.) 


112       FOREIGN  TRADE  MARKETS  AND  METHODS 

Paxson^  F.  L.  :  Independence  of  the  South  American  Bepuhli' 

cans. 
Peck^  Annie   S.:    The  South  Americmi  Tour.      (New  York, 

1916,  George  H.  Doran  Co.) 
Pepper,   Charles  M.  :   Panama   to  Patagonia.      (New   York, 

1916,   Young  People   Missionary  Movement  of  the   United 

States  and  Canada.) 
Post,  Charles   Johnson:  Across  the  Andes.      (New  York, 

1912,  Outing  Publishing  Co.) 
Petre,  F.  L.  :  Simon  Bolivar. 
Reid,  W.  a.:    Young  Man's  Chances  in  South  and  Central 

America. 
Root,  Elihu:  Latin  America  and  the  United  States.     (Harvard 

University  Press.) 
Ross,  E.  A.:  South  of  Panama.     (New  York,  1915,  Century 

Co.) 
Ruhl,  Arthur:  The  Other  Americas.     (New  York,  1908,  C. 

Seribner's  Sons.) 
Savage-Lander,  A.:  Across  Unknown  South  America,  2  vols. 

(Boston,  Little,  Brown  &  Co.) 
Sears,  Anna  Wentworth  :  Two  on  a  Tour  in  South  America. 

(D.  Appleton  &  Co.) 
Shepherd,  William  R.:  Latin  America.     (New  York,  1917, 

Henry  Holt  &  Co.) 
Sherill,  C.  H.  :  Modernising  the  Monroe  Doctrine. 
Shuey,  H.  S.:  Bibliography  of  Foreign  Trade  Publications. 

(San  Francisco,  1918,  Ten  Bosch  Co.) 
Stephens,  Henry:  South  American   Travels. 
Verrill,  a.  Hyatt:   Getting   Together  with  Latin  America. 

(New  York,  1918,  E.  P.  Button  &  Co.) 
Whymper,  Edward:  Travels  among  the  Great  Andes  of  the 

Equator. 
Zahm,  Rev.  J.  A. :  Along  the  Andes  and  Down  the  Amazon. 

(D.  Appleton  &  Co.) 
— Through  South  America's  Southland.     (D.  Appleton  &  Co.) 
— Up  the  Orinoco  and  Down  the  Magdalena.     (D.  Appleton 

&  Co.) 

It  must  be  remembered  that  new  books  are  being  pub- 
lished frequently,  and  the  student  of  South  American  con- 
ditions will  naturally  keep  in  touch  with  the  reviews  of 
these  books  in  newspapers  and  magazines. 


LITERATURE  AND  STUDY  COURSES  113 

The  Pan-American  Union  publishes  monographs  and 
booklets  from  time  to  time  covering  each  of  the  individual 
countries  of  South  America  as  to  population,  trade  statis- 
tics, races,  etc.  This  literature  can  be  acquired  by  writ- 
ing to  the  Pan-American  Union,  Washington,  D.  C. 

To  those  who  would  like  to  go  more  deeply  into  Latin 
American  study  and  who  would  like  to  specialize  some- 
what along  political  lines,  a  supplementary  list  is  given 
herewith  emphasizing  books  on  politics  and  travel : 

Bates,  Henry  Walter  :  Naturalist  on  the  Amazon  River. 

BiGELOW,  John  :  American  Policy :  The  Western  Hemisphere 
and  its  Relation  to  the  Eastern.  (New  York,  C.  Seribner's 
Sons.) 

BucKMAN,  Williamson:  Under  the  Southern  Cross  in  South 
America.     (New  York  Book  Publishing  Co.) 

BuLEY,  E.  C. :  North  Brazil.    D.  Appleton  &  Co. 

Buley^  E.  C.  :     South  Brazil.    D.  Appleton  &  Co. 

Davidson,  N.  J.:  Romance  of  the  Spanish  Main.  (Phila- 
delphia, Lippincott  Co.) 

Enock,  C.  R.:  The  Tropics.     (New  York,  C.  Seribner's  Sons.) 

France,  Harry  A.:  Vagabonding  Down  the  Andes.  (Century 
Co.) 

Halsey,  Frederick  M.  :  Railway  Expansion  in  Latin  America. 
(Moody  Magazine  and  Book  Co.) 

Hart,  Albert  Bushnell:  The  Monroe  Doctrine  (Boston, 
Little,  Brown  &  Co.) 

Helps,  Arthur:  Life  of  Pizarro;  with  some  accounts  of  his 
associates  in  the  Conquest  of  Peru. 

Holland,  W.  J.:  To  the  River  Plate  and  Back.  (G.  P.  Put- 
nam's Sons.) 

Hull,  William  L. :  The  Monroe  Doctrine:  National  or  Inter- 
national.    (G.  P.  Putnam's  Sons.) 

Johnson,  Emory  R.  :  The  Panama  Canal  and  Commerce.  (D. 
Appleton  &  Co.) 

Jones,  Chester  Lloyd:  Mexico  and  its  Reconstruction  (D. 
Appleton  &  Co.) 

Joyce,  Thomas:  South  American  Archaeology.  (G.  P.  Put- 
nam's Sons.) 

Merriman,  R.  B.  :  The  Rise  of  the  Spanish  Empire  in  the  Old 
World  and  the  New.    (Set  of  four  volumes.) 

Miller,  Leo  E.:  In  the  Wilds  of  South  America. 


114      FOREIGN  TRADE  MARKETS  AND  METHODS 

Europe: 
Alexinskt,  Gregor:  Russia  and  Europe,     (New  York,  1917, 

C.  Scribner's  Sons.) 
Anderson,  Isabel:    The  Spell  of  Belgium.     (Boston,  1915, 

Page  Co.) 
Baker,  James:  Austria:  Her  People  and  their  Homelands. 

(New  York,  1913,  John  Lane.) 
Barker,  J.  E.:  Modern  Germany.     (New  York,  1915,  E.  P. 

Button  &  Co.) 
Bell,  A.  F.   G. :  Portugal  of  the  Portuguese.     (New  York, 

1916,  C.  Scribner's  Sons.) 
Bensusan,  S.  L.  :  Home  Life  in  Spain.     (New  York,  1910, 

Macmillan  Co.) 
Birmingham,  6.  A.:  Irishmen  All.    (New  York,  1913,  Stokes.) 
BouLGER,  D.  C:  Holland  of  the  Butch,     (New  York,  1913, 

C.  Scribner's  Sons.) 
Braoq,  J.  C. :  France  Under  the  Republic.     (New  York,  1910, 

C.  Scribner's  Sons.) 
Brown,  Cyril:  Germany  as  It  Is  To-day.     (New  York,  1917, 

George  H.  Doran  Co.) 
Butler,  Ralph  :  New  Eastern  Europe,  The.    (New  York,  1919, 

Long-mans,  Green  &  Co.) 
Chapman,  C.  E.:  A  Short  History  of  Spain.     (New  York, 

1918,  Macmillan  Co.) 

^  Chekrezi,  C.  a.:  Albania,  Past  and  Present.     (New  York, 

1919,  Macmillan  Co.) 

Child,  R.  W.:  Potential  Russia.     (New  York,  1916,  E.  P. 

Button  &  Co.) 
Clark,  F.  E.:  Old  Homes  of  New  Americans.     (New  York, 

1913,  Houghton  Mifflin  Co.) 

Clark,  E.  E.  and  S.  A. :  The  Charm  of  Scandinavia.    (Boston, 

1914,  Little,  Brown  &  Co.) 

Collier,  Price:  England  and  the  English  from  an  American 

Point  of  View.     (New  York,  C.  Scribner's  Sons.) 
— Germany  and  the  Germans  from  an  American  Point  of  View. 

(New  York,  1913,  C.  Scribner's  Sons.) 
Conway,  A.  E.  :  J.  Bide  Through  the  Balkans.     (New  York, 

1017,  Sturgis  &  Walton.) 
Coxwell,  C.  F.  :  Through  Russia  in  War  Time.     (New  York, 

1916,  C.  Scribner's  Sons.) 
Deachmann,  Pool:  Industrial  Development  and  Commercial 


LITERATURE  AND  STUDY  COURSES  113 

Policies  of  the  Three  Scandinavian  Countries.     (New  York, 

1914,  Oxford  University  Press.) 

Ferriman^  Z.  D,  :  Greece  and  the  Greeks.     (New  York,  1910, 

James  Pott.) 
FoRMAK,  H.  J.:  London:  An  Intimate  Picture.     (New  York, 

1913,  McBride-Nast.) 
Fox,  Frank:  England.     (London,  A.  C.  Black.) 
— Switzerland.     (London,  1914,  A.  C.  Black.) 
Garlanda,  Federico  :  The  New  Italy.    (New  York,  1911,  G.  P. 

Putnam's  Sons.) 
Gayda,    VirginiO:    Modem    Austria:    Its    Bacial    and   Social 

Problems.     (New  York,  1915,  Dodd,  Mead  &  Co.) 
Gibbons,  H.  A.:  Paris  Eeborn.     (New  York,  1916,  Century 

Co.) 
GrORDON,  Winifred:  Rumania,  Yesterday  and  Today.     (New 

York,  1918,  John  Lane.) 
Graham,  Stephen  :  Russia  a/iid  the  World.    (New  York,  1917, 

Macmillan  Co.) 
Griffis,  W.  E.:  Belgium,  the  Land  of  Art.     (Boston,  1912, 

Houghton  Mifflin  Co.) 
— Bonnie  Scotland  and  What  We  Owe  Her.     (New  York,  1916, 

Houghton  Mifflin  Co.) 
Haggard,  H.  R.  :  Rural  Denmark  and  Its  Lessons.    (New  York, 

1911,  Longmans,  Green.) 
Henderson,  T.  F.  and  Watt,  Francis:  Scotland  of  Today. 

(New  York,  1907,  James  Pott.) 
HissEY,  J.  J.:  The  Charm  of  the  Road.     (New  York,  1910, 

Macmillan  Co.) 
Keynes,  J.  M. :  Econom,ic  Gotisequence  of  the  Peace.     (1920, 

Harcourt,  Brace  and  Howe.) 
Leach,  H.  G.  :  Scandinavia  of  the  Scandinavians.     (New  York, 

1915,  C.  Scribner's  Sons'.) 

Levine,  I.  D.:  The  Resurrected  Nations.  (New  York,  1919, 
Stokes.) 

LoGio,  G.  C. :  Bulgaria's  Problems  and  Politics.  (London,  1919, 
William  Heinemann.) 

LoMAS,  John:  In  Spain.     (1908,  Macmillan  Co.) 

Lyde,  L.  W.:  The  Continent  of  Europe.  (New  York,  Mac- 
millan Co.) 

MacDonnell,  J.  45  C:  Belgium,  Her  Kings,  Kingdom  and 
People.     (Boston,  1914,  Little,  Brown  &  Co.) 


116       FOREIGN  TRADE  MARKETS  AND  METHODS 

Meldrum,  D.  S.:  Home  Life  m  Holland.     (New  York,  1911, 

Maemillan  Co.) 
MerriwetheRj  Lee:  Seeing  Europe    by   Automobile.      (New 

York,  Baker  &  Taylor.) 
Monroe,  W.  S.:  Bulgaria  and  Her  People.  (Boston,  Page  Co.) 
— In  Viking  Land.     (Boston,  1910,  Page  Co.) 
Nevill,  Forbes;  Toynbee,  A.  J.;  Mitrany,  D. ;  and  Hogarth, 

D.  G.:  The  Balkans.     (New  York,  1917,  Oxford  University 

Press.) 
NOSEK,  v.:  Independent  Bohemia:  An  Account  of  the  Czecho- 
slovak Struggle  for  Liberty.     (London,  1918,  J.  M.  Dent 

&  Sons.) 
Peacock,  Wadham:  Albania,  the  Foundling  State  of  Europe. 

(New  York,  1914,  D.  Appleton  &  Co.) 
Keade,  Arthur:  Finland  and  the  Finns.     (New  York,  1917, 

Dodd,  Mead  &  Co.) 
RiGGS,  A.   S.:  France  from  Sea  to  Sea,     (New  York,  1913, 

McBride-Nast.) 
Russell,  C.   E.  :    Unchained  Russia.      (New  York,  1918,   D. 

Appleton  &  Co.) 
Sully,  James;  Italian  Travel  Sketches.     (New  York,  1912, 

C.  Scribner's  Sons.) 
VAin)ERLiP,  F.  A.:  What  Happened  to  Europe.     (New  York, 

1919,  Maemillan  Co.) 
ViZETELLY,  E.  A, :  The  True  Story  of  Alsace-Lorraine.     (New 

York,  1918,  Stokes.) 
Von  Heidenstam,  C.  G.  :  Swedish  Life  in  Town  and  Country. 

(New  York,  1904,  G.  P.  Putnam's  Sons.) 
Wallace,  W.  K.  :  Greater  Italy.     (New  York,  1917,  C.  Scrib- 
ner's Sons.) 
Ward,  C.  H.  B.:  The  Truth  about  Spain.     (New  York,  1911, 

Cassell.) 
Webb,  Frank:  Switzerlayid  of  th-e  Swiss.     (New  York,  1909, 

C.  Scribner's  Sons.) 
Wendell,  Barrett:  The  France  of  To-day.     (New  York,  1909, 

C.  Scribner's  Sons.) 
— The  Ireland  of  To-day.     (Boston,  1915,  Small,  Majmard  & 

Co.) 


LITERATURE  AND  STUDY  COURSES  117 

The  Near  East: 
Babrielian,  M.  C:  Armenia,  A  Martyr  Nation.     (New  York, 

Fleming  H.  Revell  &  Co.) 
Cooper,  Clayton  Sedgwick:  The  Man  of  Egypt.    (New  York, 

George  H.  Doran  Co.,  London,  Hodder  &  Stoughton.) 
Cunningham,  Alfred:  Today  in  Egypt:  Its  Administration, 

People  and  Politics.     (London,  Hurst  &  Blackett.) 
Devine,  Alexander  :  Montenegro  in  History,  Polities  and  War. 

(New  York,  F.  A.  Stokes  &  Co.) 
EvERSLEY,  Lord:  The  Turkish  Empire:  Its  Growth  and  Decay. 

(London,  T.  Fisher  Unwin.) 
Hawley,  Walter  A.:  Asia  Minor.     (New  York,  John  Lane 

Co.) 
Hazen,  Charles  Downer  :  Fifty  Years  of  Europe,  1870-1919. 

(New  York,  Henrj-  Holt  &  Co.) 
Lazarovitch-Hrebelianovich  :     Prince,  with  collaboration 

OF  Princess.     The  Servian  People:   Their  Past  Glory  and 

Their  Destiny.     (New  York,  C.  Seribner's  Sons.) 
LuKACH,  Harry  C.  :   The  Fringe  of  the  East.     (New  York, 

Macmillan  Co.) 
Marriott,  J.  A.  R. :  The  Eastern  Question:  A  Historical  Study 

in   European   Diplomacy.      (New   York,    Oxford-Clarendon 

Press.) 
Martin,  Percy  F.  :  Greece  of  th^  Twentieth  Century.     (London, 

T.  Fisher  Unwin.) 
MiLTRANY,  D. :  Eoumania:  Her  History  and  Politics.     (Oxford 

University  Pres's.) 
NwEEYA,  Samuel  K.  :  Persia,  the  Land  of  the  Magi.     (Phila- 
delphia, John  C.  Winston  Co.) 
Sloane,   Wm.   M. :    The  Balkans:  A  Laboratory   of  History. 

(Abingdon  Press.) 
Stetson-Watson,  R.   W.  :    The  Pise   of  Nationality    in    the 

Balkans.     (London,  Constable  &  Co.) 
Taylor,  A.  H.  E.:  The  Future  of  the  Soutern  Slavs.     (London, 

T.  Fisher  Unwin.) 
Woods,  Henry  C:  The  Cradle  of  the  War:  The  Near  East 

and  Pan-Germanism.     (Boston,  Little,  Brown  &  Co.) 

27j-e  Far  East  (General) : 
Coleman,  Frederick:   The  Far  East  Unveiled.     (Houghton 
Mifflin  Co.) 


US       FOREIGN  TRADE  MARKETS  AND  METHODS      ♦ 

Cooper,  Clayton  Sedgwick:  The  Modernizing  of  the  Orient. 

(New   York,  MeBride,   Nast  &    Co.;    London,    T.    Fisher 

Unwin. ) 
Eldridge,  Frank  R.  Jr.:  Trading  With  Asia.     (D.  Appleton 

&  Co.) 
Fletcher,  B.  C.  B.  :  The  Problem  of  the  Pacific.    (New  York, 

Henry  Holt  &  Co.) 
Gibbons,  Herbert  Adams  :  The  New  Map  of  Asia.    (New  York, 

Century  Co.) 
Hornbeck,  Stanley  K.:  Contemporary  Politics  in  the  Far 

East.     (New  York,  D.  Appleton  &  Co.) 
Hyndman,  H.  M.:  The  Awakening  of  Asia.     (New  York,  Boni 

&  Liveright.) 
Kaisha,  Osaka  Shosen:  Guide  to  the  Orient.     (Osaka  Mer- 
cantile Steamship  Co.,  Osaka,  Japan.) 
Millard,  T.  F.  :  Democracy  and  the  Eastern  Question.     (New 

York,  Century  Co.) 
SCHOLEFIELD,  G.  H. :  The  Pacific:  Its  Past  and  Future.     (New 

York,  C.  Scribner's  Sons.) 
Spalding,  W.  F.  :  Eastern  Exchange  Currency  and  Finance. 

(Isaac  Pitman's  Sons.) 
— Trading  with  the  Far  East.     (Irving  National  Bank.) 

China  and  Japan: 
Anderson,  L.  :  The  Spell  of  Japan.     (Boston,  Page  Co.) 
Asakawa,  K.  :  Japan.    (P.  F.  Collier  &  Son.) 
Bell,  H.  T.  M.  and  Woodhbad,  H.  G.  W.,  editors:  China  Year 

Book  for  1919-1920.     (New  York,  E.  P.  Button  &  Co.) 
Brinkley,  Capt.  F.  :  A  History  of  the  Japanese  People.    (New 
/     York,  George  H.  Doran  Co.) 

Cheng,  Sih-gung:  Modern  China,  A  Political  Study.     (Oxford 
t-     University  Press.) 
Clark,  J.  I.  C. :  Japan  at  First  Hand.     (New  York,  Dodd, 
k     Mead  &  Co.) 

Crow,  Carl:  Japan  and  America.     (McBride  &  Co.) 
Dewey,  John:  Letters  from  China  and  Japan.     (New  York, 

E.  P.  Button  &  Co.) 
Greenbie,   Sydney  P.:   Japan,  Real  and  Imaginary.      (New 

York,  Harper  &  Bros.) 
Hershey,  S.  W.  :  Modern  Japan.     (Bobbs-Merrill  Co.) 
Huang,  F.  "W.  :  Public  Debts  in  China.     (New  York,  Long- 
mans, Green  &  Co.) 


LITERATURE  AND  STUDY  COURSES  119 

KawskaMI,  K.  K.  :  Japan  and  World  Peace.      (New  York, 

Macmillan  Co.) 
— Japan  in  World  Politics.     (New  York,  Macmillan  Co.) 
— Japan  and  World  Trade.     (New  York,  Macmillan  Co.) 
KiRTLAND^  LuciAN  S. :  Samurai  Trails.    (New  York,  George  H. 

Doran  Co.) 
LaMotte^  Ellen:  Peking  Dust.     (New  York,  Centuiy  Co.) 
Latoubette^  K.  S.  :  The  Development  of  China.     (Houghton, 

Mifflin  Co.) 
— The  Development  of  Japan.     (Houghton  Mifflin  Co.) 
LiANGj  Y. :  Village  and  Town  Ldfe  in  China.    (London,  G.  Allen 

&  Unwin.) 
Miller,  G.  A.:  China  Inside  Out.     (Abingdon  Press.) 
OvERLACH,  P.  W. :  Foreign  Financial  Control  of  China.     (New 

York,  Macmillan  Co.) 
Roe,  a.  S.  :  Chance  and  Change  in  China.     (New  York,  George 

H.  Doran  Co.) 
Seaman,  L.  T.  :  From  Tokyo  Through  Manchuria.     (New  York, 

D.  Appleton  &  Co.) 
See,  C.  S.:  The  Foreign  Trade  of  China.     (New  York,  Long- 
mans, Green  &  Co.) 
TOMiMAS,    S. :    The    Open   Door    Policy    and   the    Territorial 

Integrity  of  China.     (A.  G.  Seller  Co.) 
Vinacke,  H.  M.  :  Modern  Constitutional  Development  in  China. 

(Princeton  University  Press.) 
Weale,  B.  L.  p.:  The  Truth  About  China  and  Japan.     (New 

York,  Dodd,  Mead  &  Co.) 
Werner,  E.  T.   C:   China  of  the  Chinese.      (New  York,  C. 

Scribner's  Sons.) 
"Wheeler,  W.  R.:  China  and  the  World  War.     (New  York, 

Macmillan  Co.) 

Korea: 

Brown,  Arthur  J.:   The  Mastery  of  the  Far  East.     (New 

York,  C.  Scribner's  Sons.) 
Chung,  Henry:   The  Oriental  Policy   of  the   United  States. 

(New  York,  Fleming  H.  Revell  &  Co.) 
Cynn,  Hugh  Hueng-Wo:  The  Rebirth  of  Korea.     (Abingdon 

Press.) 
McKenzie,  F.  a.:  Korea's  Fight  for  Freedom.     (New  York, 

Fleming  H.  Revell  &  Co.) 


120       FOREIGN  TRADE  MARKETS  AND  METHODS 

Philippine  Islands: 

Ajsnold^  J,  R.  :  The  Philippines,  the  Xand  of  Palm  and  Pine. 
(An  official  guide  and  handbook.)     (Manila.) 

Atkinson,  F.  W.  :  The  Philippine  Islands. 

Ireland,   Alleyne:    The   Far  Eastern   Tropics.      (Houghton 
Mifflin  Co.) 
LeRoy,  James  A.:  The  Americans  in  the  Philippines.     (Hough- 
ton Mifflin  Co.) 

Miller,  Hugo  H.  :  Economic  Conditions  in  the  Philippines. 

Report  of  the  Governor  General  of  the  Philippine  Islands  to 
the  Secretary  of  War  (1917,  Washington). 

Worcester,  Dean  C:  The  Philippities,  Past  and,  Present. 
(New  York.) 

India : 

Butler,  Sir  Harcourt:  Indian  Beforms,  Imperial  Idea  and 
Provincial  Progress,  six  speeches.  (Calcutta,  India,  Gov- 
ernment Press,  United  Provinces.) 

Fuller  :  The  Empire  of  India. 

Ladd,  George  Trumbull  (R.  Badger) :  Intimate  Glimpses  of 
Life  in  India. 

Spens,  a.  B.'.  a  Winter  in  India. 

Elwin,  E.  F.  :  India  and  the  Indians.  (New  York,  1913,  C. 
Scribner's  Sons.) 

Fielding-Hall,  H.  :  The  Passing  of  Empire.  (Boston,  Hough- 
ton  Mifflin  Co.) 

Graham,  W.  A.:  Siam.    (London,  De  La  More  Press.) 

Malcolm,  Ian  :  Indian  Pictures  and  Problems.  (New  York, 
1907,  E.  P.  Dutton  &  Co.) 

Murray  :  Handbook  for  Travelers  in  India,  Burma  and  Ceylon. 
(New  York,  C.  Scribner's  Sons.) 

Rees,  J.  D. :  The  Real  India.     (London,  1907,  Menhuen.) 

Scott,  Sir  J.  G.:  Burma.     (London,  De  La  More  Pi-ess.) 

Strachey,  Sir  John:  India,  Its  Administration  and  Progress. 
(New  York,  1911,  Macmillan  Co.) 

Wright,  Arnold  &  Reid,  T.  H.  :  The  Malay  Peninsula.  (New 
York,  1912,  C.  Scribner's  Sons.) 

— The  Indian  Empire.     (New  York,  Oxford  University  Press.) 

Dutch  East  Indies: 

Cabaton,  a.:  Java,  Sumatra  and  Dutch  East  Indies.  (London, 
T.  Fisher  Unwin.) 


LITERATURE  AND  STUDY  COURCES  121 

Day,  Olive:  The  Dutch  m  Java.    (New  York,  Macmillan  Co.) 
De  Witt,  Augusta:  Java,  Facts  and  Fancies.     (Philadelphia, 

Lippineott.) 
Kartini,   Raden   Aljeng:   Letters   of  a    Javanese    Princess, 

translated  from  the  original  Dutch  by  Agnes  L,  Symmers. 

(Alfred  A.  Knopf.) 

Canada : 

CuERAN,  W.  T.  &  Calkins,  H.  A.:  In  Canada's  Wonderful 

Northland.     (New  York,  1917,  G.  P.  Putnam's  Sons.) 
Goodrich,    J.    K. :    The    Coming    Canada.      (Chicago,    1913, 

McCIurg.) 
Laut,  a.   C.  :    2'he  Canadian  Commonwealth.      (Indianapolis, 

1915,  Bobbs,  Men-ill  Co.) 
Miller,  J.  0.:  The  New  Era  in  Canada.     (New  York,  1917, 

E.  P.  Dutton  &  Co.) 
Wood,  R.  K.  :  The  Tourist's  Maritime  Provinces.     (New  York, 

1915,  Dodd,  Mead  &  Co.) 

Australia: 

DuKCAN,  Norman:   Australian  Byways.      (New   York,  1915, 

Harper.) 
FiTCHETT,  W.  R. :  The  New  World  of  the  South.     (New  York, 

1913,  C.  Seribner's  Sons.) 
Fraser,  J.  F. :  Australia:  The  Making  of  a  Nation.     (New 

York,  1910,  Cassell.) 
Scholefield,  G.  H.  :  New  Zealand  in  Evolution.     (New  York, 

1909,  C.  Seribner's  Sons.) 
Scott,  Ernest:  A  Short  History  of  Australia.     (New  York, 

1916,  Oxfox-d  University  Press.) 

Africa : 

Bryce,   James:   Impressions  of  South  Africa.      (New  York, 

1900,  Century  Co.) 
LORIMER,  Norma  :  By  the  Waters  of  Africa.     (New  York,  1917, 

Stokes. ) 
WoRSFORD,  W.  B. :  The  Union  of  South  Africa.    (Boston,  1913, 

Little,  Brown  &  Co.) 

West  Indies: 

Ober,  F.   a.:   a   Guide  to  the   West  Indies  and  Bermudas. 

(New  York,  1914,  Dodd,  Mead  &  Co.) 
Pitman,  F.  W.  :  The  Development  of  the  British  West  Indies, 
1700-1763.    (New  Haven,  1917,  Yale  University  Press.) 


122       FOREIGN  TRADE  MARKETS  AND  METHODS 

Treves,  Sir  Frederick  t  The  Cradle  of  the  Beep.    (New  York, 

1908,  E.  P.  Button  &  Co.) 
Verrill,  a.  H.  :  Isles  of  Spice  and  Palm.     (New  York,  1915, 

D.  Appleton  &  Co.) 
—The  Book  of  the.  West  Indies.     (New  York,  1917,  E.  P. 

Button  &  Co.) 

General  Commerce: 
Brown,  H.  G.  :  Principles  of  Commerce,     (New  York,  Mac- 

millan  Co.) 
FiLSiNGER,  E.  B. :  Exporting  to  Latin  America.     (New  York, 

1916,  B.  Appleton  &  Co.) 
Ford:  Foreign  Trade  of  the  United  States. 
Hough,  B.  Olney:  Practical  Exporting.     (New  York,  1919, 

Johnson  Export  Publishing*  Co.) 
Marshal:  Industry  and  Trade. 
Moore,  J.  T.  M. :  American  Business  in  World  Markets.     (New 

York,  1919,  George  H.  Boran  Co.) 
Pepper,  Charles  M.  :  American  Foreign  Trade.     (New  York, 

1919,  Century  Co.) 
Preciado,  a.  A.:  Exporting  to  the  World.     (New  York,  1919, 

J.  A.  MeCann.) 
Savay,    Norbert:    Principles    of    Foreign    Trade.      (Ronald 

Press.) 
Wolfe,  A.  J. :  Theory  and  Practice  of  International  Commerce. 

(New  York,  1919,  International  Book  Co.) 

Foreign  Exchange  and  Banking: 

Clare,  G.  :  A.  B.  C.  of  Foreign  Exchange.     (New  York,  1911, 

Macmillan  Co,) 
Escher,  Franklin:  Elements  of  Foreign  Exchange.     (New 

York,  1917,  Bankers  Publishing  Co.) 
— Foreign  Exchange  Explained.     (New  York,  1917,  Macmillan 

Co.) 
Gonzales,  V.:  Modern  Foreign  Exchange.     (New  York,  1914, 

C.  S.  Hammond  Co.) 
Goschen,  G.  J.:   Theory  of  the  Foreign  Exchanges.      (New 

York,  C.  Scribner's  Sons.) 
Johnson  &  Huebner:  Principles  of  Foreign  Exchange. 
Kniffin,  W.  E.:  Practical  Work  of  a  Bank. 
Margraff,  a,  W.:  International  Exchange.     (Chicago,  1912, 

Fergus  Printing  Co.) 


LITERATURE  AND  STUDY  COURSES  123 

MOORE^  W.  U.  t  Law  of  Commercial  Paper.     (New  York,  1916, 

D.  Appleton  &  Co.) 
Shugrue:  Problems  in  Foreign  Exchange. 
Spalding,  W.  E.  :  Eastern  Exchange,  Currency  and  Finance. 

(New  York,  1917,  Pitman  &  Sons.) 
— Foreign  Exchange  and  Foreign  Bills.     (London,  1918,  Pit- 
man &  Sons.) 
Stewart-Patterson,  E.  L.  :  Domestic  and  Foreign  Exchange. 
Todd,  John  A. :  Mechanism  of  Exchange.     (London  and  New 

York,  1917,  Oxford  University  Press.) 
"Whitaker,  a.  C.  :  Foreign  Exchange.    (D.  Appleton  &  Co.) 
Withers,  H.  :  International  Finance  and  Trade.    (New  York, 

1916,  E.  P.  Button  &  Co.) 
—Meaning  of  Money.     (New  Y^ork,  1916,  E.  P.  Button  &  Co.) 
—Money  Changing.     (New  Y^ork,  1913,  E.  P.  Button  &  Co.) 
— War  and  Lombard  Street.     (New  York,  1915,  E.  P.  Button 

&Co.) 
Wolfe,  0.  H. :  Practical  Banking.     (Chicago,  1917,  La  Salle 

Extension  University.) 
York,    Thomas:    Foreign    Exchange:    Theory    and   Practice. 

(New  York,  1920,  Ronald  Press.) 

Shipping : 

Clark,  A.  H.:  Clipper  Ship  Era.     (New  York,  1918,  G.  P. 

Putnam's  Sons.) 
Be  Haas,  J.  A. :  Foreign  Trade  and  Shipping. 
Hough,  B.  Olney:  Ocean  Traffic  and  Trade.     (Chicago,  1914, 

La  Salle  Extension  University.) 
Huebner,  G.  G.  :  Ocean  Steamship  Traffic  Management.    (New 

York,  1920,  B.  Appleton  &  Co.) 
Hutchinson,    Lincoln:    Panama    Canal    and    International 

Trade  Competition.     (New  York,  1915,  Macmillan  Co.) 
Johnson,  E.  R.  :  Panama  Canal  and  Commerce.     (New  York, 

1916,  B.  Appleton  &  Co.) 
Johnson,  E.  R.  &  Huebner,  G.  G.  :  Principles  of  Ocean  Trans- 
portation.    (New  York,  1918,  B.  Appleton  &  Co.) 
MacElwee,  R.  S.  :  Ports  and  Terminal  Facilities.     (New  Y'ork, 

1918,  McGraw,  Hill  Co.) 
Martin,  C.  C.  :  Export  Packing.     (New  York,  1912,  Johnson 

Export  Publishing  Co.) 
Meeker,  Royal  :  History  of  Shipping  Subsidies.     (New  York, 

1905,  Macmillan  Co.) 


124       FOREIGN  TRADE  MARKETS  AND  METHODS 

OwEN",  Douglas  t  Ocean  Trade  and  Shipping.     (New  York, 

1914,  G.  P.  Putnam's  Sons.) 
Smith,  J.  Russell:  Influence  of  the  Great  War  upon  Ship- 

ing.     (New  York,  1919,  Oxford  University  Press.) 
— Organization  of  Oeeam,  Commerce.     (New  York,  1905.     D. 

Appleton  &  Co.) 
Stevens,    R.    W.  :    Stowage    of   Ships    and    Their    Cargoes. 

(London,  Longmans,  Green  &  Co.) 
ZiMMERMANN,  Erich  W.  AND  Clark,  M.  C.  :  Foreign  Trade  and 

Shipping.    (New  York,  1917,  Alexander  Hamilton  Institute.) 

Marine  Insurance: 
Baty,  T.:  Britain  and  Sea  Law.    (London,  1912,  Bell  &  Sons.) 
CONGDON,  Ernest  W.  :   General  Average,  Its  Principles  and 

Practice  in  the   United  States.      (New  York,  1913,  Baker, 

Voorhis  &  Co.) 
De  Hart,  E.  L.  and  Simey,  R.  I.:  Armould  on  the  Law  of 

Marine  Insurance  and  Average.  (London,  1914,  Stevens  and 

Sons,  Ltd.) 
Duckworth,  Lawrence:  Principles  of  Marine  Law.    (London, 

1916,  Pitman  &  Sons.) 
HuEBNER,  S.  S.:  Marine  Insurance. 

— Property  Insurance.     (New  York,  1911,  D.  Appleton  &  Co.) 
Marsden,   R.   6.:    Collisions  at  Sea.      (Boston,   1911,   Little, 

Brown  &  Co.) 
Poor,  Wharton:  Charter  Parties  and  Ocean  Bills  of  Lading. 

(Albany,  N.  Y.,  1920,  Matthew  Bender  and  Co.) 
Commentaries  on  the  Law  of  Insurance.     (Houghton    Mifflin 

Co.) 


CHAPTER  VII 

AMERICAN  SHIPPING  AND  OUR  NEW  MERCHANT  MARINE 

At  last  the  present  American  generation  seems  fairly 
waking  up  to  realize  the  truth  of  the  words  of  Sir  Walter 
Raleigh : 

Whosoever  commands  the  sea  commands  the  trade  of  the  world; 
whosoever  commands  the  trade  of  the  world  commands  the  riches 
of  the  world;  and  consequently  the  world  itself. 

It  seems  difficult  to  believe  that  for  forty  years,  from 
1789  to  the  year  1831,  American  ships  carried  an  average 
of  90  per  cent  of  the  foreign  commerce  of  the  United 
States.  In  the  year  1826  they  carried  as  high  as  92.5 
per  cent,  the  largest  portion  ever  borne  under  the  Ameri- 
can flag  in  any  year,  at  least  up  to  the  opening  of  the 
World  War.  It  was  at  this  time  that  Daniel  Webster 
said : 

We  have  a  commerce  which  leaves  no  sea  unexploited;  navies 
which  take  no  law  from  supeiior  forces. 

What  was  the  explanation  of  this  early  interest  of 
Americans  in  maritime  pursuits? 

It  was  the  realization  expressed  by  Thomas  Jefferson  as 
Secretary  of  State  in  1793.  Speaking  of  navigation  he 
said: 

Its  value  as  a  branch  of  industry  is  enhanced  by  the  depend- 
ence of  so  many  other  branches  upon  it.  In  times  of  general 
peace  it  multiplies  competitors  for  employment  in  transportation, 

125 


126       FOREIGN  TRADE  MARKETS  AND  METHODS 

and  so  keeps  that  at  its  proper  level  and  in  times  of  war,  that 
is  to  say,  when  those  nations  who  may  be  our  principal  carriers 
shall  be  at  war  with  each  other,  if  we  have  not  within  ourselves 
the  means  of  transportation,  our  produce  must  be  exported  in 
belligerent  vessels,  at  the  increased  expense  of  war  freight  and 
insurance,  and  the  articles  which  will  not  bear  that  must  perish 
on  our  hands. 

America's  first  merchant  marine  came  because  of  the 
dire  necessity  of  the  times.  Foreign  ships  had  flooded  the 
country  with  foreign  manufactures.  We  were  not  able 
to  export  produce  sufficient  to  pay  for  our  imports.  The 
specie  of  the  country  was  swept  away  and  the  national 
debt  was  growing.  It  was  difficult  for  skilled  labor  to 
find  employment  and  the  nation  was  threatened  with 
misery.  The  very  independence  of  the  new  country  seemed 
about  to  be  abrogated. 

The  Congress  that  met  in  1789  was  a  notable  one,  for 
it  passed  a  tariff  act  which  Washington  signed  July  4, 
1789,  containing  the  first  American  declaration  of  duty 
on  imports  in  American  vessels,  and  favored  American 
ships  in  the  carriage  of  tea  from  the  ports  of  the  Orient. 
This  tariff  stimulated  tremendously  home  production. 
Industries  became  diversified  and  flourished,  affording 
profitable  employment  for  all.  The  country's  specie  re- 
turned, manufactures  flourished,  shipbuilding  came  by 
leaps  and  bounds,  and  the  new  republic  was  crowned  with 
prosperity  throughout  all  its  borders. 

Up  to  this  time  only  23.8  per  cent  of  the  imports  and 
exports  of  the  United  States  was  carried  in  American 
ships.  Before  the  new  law  had  been  working  five  years 
American  ships  were  carrying  90  per  cent  of  these  imports 
and  exports.  The  act  was  amended  about  this  time  and, 
instead  of  a  reduction  of  duty  in  favor  of  American  ves- 
sels, an  increase  of  10  per  cent  was  imposed  on  all  imports 
in  foreign  boats.  These  were  red  letter  years  of  maritime 
history  in  the  United  States.  The  intervening  years 
between  1831  and  the  present  day  are  not  intended  to  give 
an  American  a  happy  quarter  of  an  hour. 


AMERICAN  SHIPPING  127 

During  the  last  twenty  years,  previous  to  1914,  instead 
of  90  per  cent  of  our  foreign  trade  being  carried  in  Ameri- 
can owned  aiid  operated  ships,  American  vessels  carried 
an  average  of  less  than  10  per  cent  of  such  products,  and 
this  in  spite  of  the  fact  that  our  exports  have  grown  from 
$71,670,735  in  1830  to  $2,364,579,148  in  1914,  and  imports 
during  the  same  period  increased  from  $62,360,956  to 
$893,926,657.  In  1810  the  cubic  feet  of  investment  in 
American  shipping  per  capita  was  13.55  cubic  feet;  in 
1910  it  was  only  .85  cubic  feet.  In  other  words,  previous 
to  tlie  European  war,  our  commerce  was  practically  given 
over  to  foreigners  to  transport  and  the  loss  to  the  country 
has  been  tremendous. 

These  are  facts  of  deep  significance,  not  simply  to  ship- 
builders and  politicians,  but  to  the  average  laborer  and 
the  citizen  of  whatever  class,  because  it  has  been  proved 
beyond  the  shadow  of  a  doubt  that  a  great  shipbuilding 
program  stimulates  virtually  every  industry  of  a  nation, 
and  assures  certainty  of  continuous  employment  and  a 
steady  manufacture. 

Consider,  if  you  are  skeptical  about  the  necessity  of  an 
American  merchant  marine,  these  facts ! 

For  the  twenty-year  period  ending  in  1914  our  total 
overseas  conunerce  amounted  to  nearly  $5,000,000,000, 
an  increase  of  78%  per  cent  over  the  previous  twenty 
years.  In  the  carrying  of  this  commerce  American  ships 
earned  a  little  less  than  $300,000,000,  and  foreign  ships 
more  than  $2,500,000,000. 

Let  foreign  trade  increase  at  the  same  rate  during  the 
next  twenty  years  and  it  would  amount  to  $89,000,000,000 
which  would  mean,  providing  the  United  States  decided 
not  to  have  a  merchant  marine,  that  we  would  give  over 
to  foreign  nations  and  their  merchant  marines  $5,000,000,- 
000  in  freight  charges  alone.  Nor  does  this  startling  fact 
take  account  of  the  millions  earned  every  year  by  foreign 
ships  carrying  our  passengers  and  mails;  nor  do  the 
figures  include  the  enormous  profits  on  the  cost  of  repairs, 
wages,  stores,  etc.,  now  paid  into  foreign  treasuries. 


128       FOREIGN  TRADE  MARKETS  AND  METHODS 

It  has  been  carefully  estimated  that  the  American 
nation  has  bought  and  paid  for  in  the  past  twenty  years 
in  freight  charges  alone  the  equivalent  of  26,965,692  tons 
of  shipping,  more  than  the  world's  total  tonnage  at  the 
outbreak  of  the  war.  And  if  our  former  lethargy  regard- 
ing these  matters  continues  during  the  next  twenty  years 
we  shall  proceed  to  pay  in  freight  charges  to  foreign  na- 
tions for  48,088,589  tons  of  shipping. 

Until  the  war  awakened  the  nation  to  these  grave  con- 
ditions all  efforts  of  organizations  and  loyal  citizens  and 
manufacturers  have  been  in  vain.  The  Middle  West  has 
said: 

Oh,  ships'?  That  is  a  matter  for  shipbuilders  and  the  people 
in  the  seaport  states  in  the  East.  We  can  get  our  goods  carried 
in  foreign  bottoms  and  why  slaould  we  worry? 

The  politician  has  cared  little  and  known  less  about 
foreign  trade  and  foreign  nations.  The  country  was  so 
busy  in  a  microscopic  policy  of  home  industry  that  it  lost 
its  perspective  upon  world  affairs.  American  travelers 
have  returned  to  the  country  to  report  that  they  have 
found  in  foreign  ports  the  ships  of  every  other  nation 
under  the  sun,  save  those  of  the  United  States.  The 
following  words  of  Lewis  Nixon  are  a  sample  of  the  warn- 
ing and  pleas  given  forth  without  impression  upon  the 
average  American. 

A  glance  at  the  harbor  in  New  York  will  show  great  fleets  of 
ships  constantly  added  to  by  more  and  larger  boats,  which  were 
built  from  the  earnings  of  our  country  and  constantly  growing 
in  earning  power.  There  is  plenty  of  profit  if  we  can  get  into 
the  business.  At  the  present  time  we  are  faced  upon  the  ocean 
by  a  monopoly  of  ocean  carriers,  together  with  inordinate  naval 
powers;  yet  the  very  men  who  rail  against  domestic  monopoly 
not  only  fail  to  appreciate  this  great  menace  to  our  national 
prosperity,  but  actually  belittle  the  efforts  of  those  who  are 
attempting  to  awaken  our  people  to  a  realization  of  it. 

That  which  the  efforts  of  many  a  well-wisher  of  our 
maritime  independence  found  it  impossible  to  bring  about 


AMERICAN  SHIPPING 


129 


has  come  along  with  the  war  and  the  particular  emphasis 
that  tliis  conflict  laid  upon  the  need  of  shipping. 

The  leadership  of  the  United  States  Shipping  Board, 
supported  by  thousands  of  shipbuilders  and  their  em- 
ployees, newly  enlisted  in  this  fresh  industry,  has  aroused 
a  hope  that  after  all  these  years  the  United  States  may 
see  its  flag  upon  the  ships  of  the  seven  seas. 

In  order  to  reveal  this  new  interest  of  the  United  States 
in  shipping  matters,  it  will  be  of  interest  to  study  a  few 
maritime  facts. 

Merchant  fleets  of  the  world  at  the  end  of  June,  1914, 
totaled  approximately  35,000,000  gross  tons  in  ocean-going 
steamers  of  1600  gross  tons  or  more.  There  was  in  addi- 
tion to  this  tonnage  approximately  7,000,000  tons  made  up 
of  smaller  steamers  from  100  to  1600  gi'oss  tons  in  size. 
The  following  table  gives  an  idea  of  the  way  this  tonnage 
was  distributed  among  the  different  nations: 

World's  Merchant  Steam  Tonnage  for  June  30,  1914 


Country 


1600  Gross  Tons 
and  Over 


100  Gross  Tons 
and  Over 


United  Kingdom 

Germany 

France 

United  States. . . 

Japan 

Holland 

Italy 

Norway 

Austria-Hungary 

Greece 

Spain 

Russia 

Sweden 

Denmark 

Belgium 

Brazil 

Portugal 

Scattering 

Total.... 


17,465,000 

4,650,000 

1,645,000 

1,520,000 

1,400,000 

1,275,000 

1,250,000 

1,125,000 

950,000 

725,000 

700,000 

585,000 

545,000 

455,000 

285,000 

150,000 

50,000 

360,000 


20,100,000 

5,150,000 

1,920,000 

1,875,000 

1,750,000 

1,475,000 

1,430,000 

1,950,000 

1,950,000 

820,000 

900,000 

850,000 

1,030,000 

785,000 

345,000 

300,000 

90,000 

795,000 


35,135,000 


42,615,000 


130       FOREIGN  TRADE  MARKETS  AND  METHODS 

It  will  be  seen  from  these  figures  that  out  a  total  of 
35,000,000  tons  all  but  500,000  tons  was  owned  by  fifteen 
countries  and,  furthermore,  that  the  bulk  of  the  world's 
steam  tonnage  in  1914  belonged  to  eight  nations.  The 
United  Ejngdom,  with  more  than  17,000,000  tons;  Ger- 
many, with  4,500,000;  and  the  other  six — ^France,  the 
United  States,  Japan,  the  Netherlands,  Italy  and  Norway 
— ranging  between  1,000,000  and  2,000,000  tons  each,  con- 
trolled approximately  85  per  cent  of  the  ocean-going 
steamships  of  the  world.  It  is  quite  clear,  therefore,  that 
the  burden  of  maritime  transport  and  the  losses  sustained 
fell  principally  on  these  nations.  The  dominant  place  of 
British  shipping  and  the  weak  position  of  the  United 
States  was  evident. 

During  the  war  the  allied  and  neutral  fleets  suffered 
heavily  and  the  combined  efforts  of  the  enemies  of  the 
allies  cut  deeply  into  the  tonnage  especially  of  Great 
Britain  and  France.  Great  Britain  lost  more  tonnage  dur- 
ing the  war  than  was  owned  by  any  two  other  nations  at 
the  outbreak  of  the  war.  The  losses  of  the  United  States 
were  relatively  les^than  those  of  the  other  allies  and  less 
than  some  of  the  neutrals,  especially  Norway,  Sweden  and 
Denmark.  This  was  due  in  part  to  the  small  merchant 
fleets  which  our  country  owned  during  the  war  and  in 
part  because  of  our  late  entry  into  the  conflict.  A  further 
reason  might  be  attributed  to  the  fact  that  there  was  less 
need  for  United  States  ships  to  cross  the  submarine  zone. 
The  total  losses  estimated  from  enemy  operations  during 
the  war  were  13,000,000  gross  tons. 

In  the  following  table  are  included  the  losses  of  all  sizes 
and  classes  of  vessels,  but  mainly  of  seagoing  steamers. 
Add  to  these  losses  from  marine  risk,  about  2,200,000 
tons  and  the  total  comes  up  to  15,000,000  gross  tons  of 
loss  during  the  war  period  or  about  35  per  cent  of  the 
world's  tonnage  of  all  sizes  and  classes  when  the  war 
opened.  It  may  be  noted  that  losses  from  marine  risk 
averaged  normally  about  2i/^  per  cent  a  year,  and  while 
the  war  was  in  progress  losses  from  all  causes  occurred 


AMERICAN  SHIPPING  131 

at  more  than  three  times  this  normal  rate.  If  there 
had  not  been  a  speeding  up  of  shipbuilding  during  this 
period,  replacing  losses  by  new  construction,  the  world's 
fleets  would  have  decreased  by  about  one-third. 

Allied  and  Neuteal  Losses  of  Merchant  Tonnage 

country  gross  tons 

Great  Britain   7,753,746 

Norway    1,178,335 

France    907,168 

Italy    852^24 

United  States  383,987 

Greece 337,545 

Denmark    239,922 

Sweden  207,733 

Holland    199,975 

Russia 183,852 

Spain 167,693 

Japan   127,470 

Belgium    98,874 

Portugal 92,382 

Miscellaneous    91,936 

Total     12,814,742 

The  war  developed  in  the  United  States  a  new  vigor  of 
shipbuilding,  and  ships  which  take  from  one  to  three 
years  to  complete  in  peace  time  were  built  in  a  few  months 
and  in  some  cases  in  a  few  weeks  even,  during  much 
feverish  activity.  This  period  was  marked  by  the 
standardization  of  vessels  and  by  a  nation-wide  mobiliza- 
tion of  industrial  resources  for  the  purpose  of  speeding 
up  ship  construction.  The  total  construction  for  the  war 
period  amounted  to  nearly  12,000,000  gross  tons.  The 
following  table  will  give  an  idea  of  the  annual  construction 
of  vessels  for  three  momentous  years  in  shipbuilding  in- 
dustry on  the  part  of  the  principal  shipbulding  nations : 


132       FOREIGN  TRADE  MARKETS  AND  METHODS 
Shipbuilding  in  the  Principal  Countries,  1916  to  1918 


United  States 

United  Kingdom .  , 

Japan 

Holland 

Italy 

Norway 

Sweden , 

Scattering 

World  total 


Gross  Tons, 
1918 


3,033,000 

1,348,100 

489,900 

74,000 

60,700 

47,700 

39,500 

354,500 


5,447,400 


Gross  Tons, 
1917 


997,900 
1,348,100 

350,100 

148,700 
38,900 
46,100 
26,700 

166,600 


2,937,800 


Gross  Tons, 
1916 


504,200 

608,200 

145,600 

180,100 

56,600 

42,400 

26,700 

124,300 


1,688,100 


The  above  figures  not  only  reveal  a  great  increase  in 
total  tonnage  built,  but  they  show  the  United  States  in 
a  leading  position  in  this  recent  construction  period.  Our 
country  has  increased  its  output  sixfold  in  three  years 
and  the  total  of  more  than  3,000,000  tons  of  shipbuilding 
in  1918  was  greater  than  all  the  world  had  built  in  the 
preceding  year.  Japan  increased  its  output  threefold, 
while  Great  Britain  produced  less  tonnage  than  in  pre- 
war years,  because  of  the  fact  that  so  many  of  her  yards 
were  required  for  naval  craft.  At  the  end.  of  1918  the 
world's  merchant  fleet  of  ocean-going  steamships  (1600 
tons  and  over)  totaled  about  32,600,000  gross  tons. 

The  relative  importance  of  the  principal  nations  which 
control  the  world's  merchant  marine  has  thus  altered  con- 
siderably during  the  past  four  or  five  years,  the  United 
Kingdom  still  leading  with  more  than  14,000,000  tons  and 
the  United  States  with  upwards  of  6,000,000  tons  taking 
second  place.  The  four  leading  maritime  countries  to-day 
are  the  United  Kingdom,  the  United  States,  Japan,  France. 
These  four  and  their  combined  fleets  own  upwards  of  75 
per  cent  of  the  world's  tonnage.  By  the  end  of  the  present 
year  the  United  States  should  have  adequate  shipping  to 
carry  at  least  50  per  cent  of  its  overseas  trade  and,  if 
legislation  and  leadership  are  forthcoming,  our  country 


AMERICAN  SHIPPING  133 

should  really  start  upon  a  new  period  of  shipping  history. 
It  must  be  remembered,  however,  that  the  British  fleet  is 
rapidly  being  enlarged  and  is  still  the  leading  merchant 
fleet  of  the  world,  and  promises  to  remain  in  this  leader- 
ship, since  Great  Britain  is  so  vitally  dependent  upon  the 
sea  and  ships  for  its  expansion  and  livelihood. 

The  great  need  at  present  in  our  country  is  for  definite 
and  decisive  action  relative  to  laws  by  Congress  that  will 
make  it  possible  for  our  country  to  compete  on  even  terms 
with  other  nations  on  the  sea. 

There  is,  however,  a  kind  of  indefiniteness  about  all  of 
our  plans  which  troubles  the  practical  and  experienced 
shipowner  and  manufacturer.  Our  maritime  affairs  are 
somewhat  like  the  description  of  an  old  darky  woman 
of  her  husband's  illness.  When  asked  how  her  man  was 
getting  on,  she  replied: 

Oh,  he's  just  lingering  along,  lingering  along.  I  do  wish  he 
would  do  something  definite. 

Doubt  is  expressed  by  many  of  our  most  capable  ship- 
ping men  as  to  our  actual  ability  to  compete  with  Oriental 
ship  labor,  and  there  is  also  doubt  as  to  whether  this 
country  can  build  ships  cheaper  than  those  constructed 
on  the  Clyde.  There  is  still  also  uncertainty  as  to  the 
best  method  of  operation  of  our  ships. 

Shall  the  government  own  and  operate  the  vessels? 
Should  ships  be  owned  and  run  by  private  firms?  Shall 
the  ships  be  sold  at  auction?  Or  shall  we  follow  the 
suggestion  of  a  former  vice-president  of  the  Emergency 
Fleet  Corporation,  who  believes  that  the  government 
should  treat  the  ships  as  New  York  City  treats  the  sub- 
ways— own  them  and  lease  them  to  private  operators? 

The  very  evident  tendency  at  present  both  on  the  part 
of  the  Shipping  Board  and  shipping  men  generally  is 
toward  the  private  operation  at  least  of  our  merchant 
marine,  while  there  are  rumors  occasionally  of  subsidies 
together  with  new  ideas  of  ownership  and  operation  more 
or  less  constantly  forthcoming. 


134       FOREIGN  TRADE  MARKETS  AND  METHODS 

Whatever  plan  is  adopted  the  country  faces  an  intricate 
problem,  and  this  problem,  revolves  about  economic 
advantage  and  possibility. 

Kobert  Dollar,  the  veteran  shipowner,  sees  the  problem 
from  the  point  of  view  of  o^vners  of  ships  and  believes 
that  these  men  alone  must  be  held  responsible  to  develop 
trade.  He  says  that  ship  charterers  having  no  money 
invested  will  operate  the  ships  only  as  long  as  they  can 
make  a  profit. 

Mr.  Dollar  further  advocates  the  selling  of  the  ships  by  the 
government  to  private  owners  on  the  installment  plan; 
he  would  also  like  to  have  the  government  pay  the  dif- 
ference between  the  American  standard  wage,  say  $60 
a  month,  and  the  Oriental  standard  pay  of  perhaps  $15 
a  month. 

Then,  again,  the  ever  present  Seamen's  Act  rises  to  the 
surface,  and  there  is  a  consensus  of  opinion,  rather  than 
a  consensus  of  acts,  to  the  end  that  certain  portions  of 
this  bill  at  least  should  be  radically  changed,  if  American 
ships  are  to  be  placed  again  on  the  Pacific  in  competition 
with  Japanese  carriers. 

Add  to  these  walls  of  difficulty  a  slow-moving  and,  if 
we  are  to  judge  from  the  past,  an  ill-informed  Congress, 
more  or  less  indifferent  to  all  matters  outside  the  con- 
fines of  the  United  States,  and  the  need  becomes  more  and 
more  pressing  for  some  decisive  and  experienced  leader- 
ship. 

A  statement  by  the  National  Foreign  Trade  Council, 
of  which  Mr.  James  A.  Farrell  is  Chairman,  offers  specific 
suggestions  for  handling  the  shipping  problems: 

Congress  has  declared  in  favor  of  private  ownership  of  our 
merchant  marine  as  soon  as  practicable,  but  under  present  con- 
ditions it  is  impracticable  to  dispose  of  any  considerable  pro- 
portion of  our  merchant  marine  to  private  owners  at  fair  prices. 

So  much  of  the  fleet  as  cannot  be  chartered  on  a  bare  boat 
basis  or  time  charter  to  private   operators  should  be  laid  up 


AMERICAN  SHIPPING  135 

pending  the  revival  of  world  commerce.  Meanwhile  the  fleet 
will  serve  our  national  security  as  a  naval  auxiliary  in  case  of 
necessity. 

The  plan  should  be  abandoned  of  allocating  ships  to  load  at 
ports  and  for  trade  routes  irrespective  of  the  tonnage  of  cargo 
offering  or  of  the  losses  to  the  Government  attendant  on  this 
policy. 

While  it  is  obvious  that  the  ultimate  sale  price  will  be  measured 
by  the  world  market  for  similar  ships,  such  parity  of  price  and 
successful  operation  can  be  obtained  only  if  the  operating  costs 
arc  approximately  equal  to  those  of  our  foreign  competitors. 

Present  shipping  laws  requiring  larger  crews  subject  American 
vessels  to  a  disadvantage  estimated  at  5  per  cent  on  the  capital 
investment,  while  the  compulsory  advance  of  half  wages  in  any 
foreign  port  of  call  adds  a  further  burden  of  cost  by  involving 
excessive  delays. 

As  continued  maintenance  of  the  American  merchant  marine 
is  of  vital  interest  to  American  producers,  exporters  and  importers, 
they  should  require  the  employment  of  American  vessels  in  the 
carrying  of  their  shipment  of  exports  and  imports  to  such  extent 
as  they  are  able  to  exercise  preference  or  control,  and  in  any 
ease  they  should  prevent  discrimination  against  American  ships 
in  such  transportation. 

It  is  believed  that  the  adoption  of  these  recommendations  will 
save  the  Government  its  present  large  loss  in  carrying  on  the 
existing  plan  of  operation  and  will  insure  ultimately  the  retire- 
ment of  the  Government  from  the  shipping  business  through  the 
sale  to  private  owners  of  the  fleet  at  reasonable  prices. 

Between  the  United  States  and  its  possessions  and  foreign 
ports,  rapid,  regular  combined  passenger  and  freight  service 
should  be  maintained  for  the  prompt  and  regular  carriage  of  the 
mails,  express,  freight  and  merchandise. 

The  State  and  Federal  governments  are  urged  to  remove  those 
disabilities  caused  by  nonunifonnity  of  State  laws  and  excessive 
taxation  which  place  American  insurance  at  a  disadvantage  with 
the  foreign  insurance  market  in  which  they  must  compete. 
We  urge  the  enactment  of  the  marine  insurance  measure  now 
pending  in  Congress,  a  model  upon  which  uniform  State  legisla- 
tion may  be  based. 

American  export  business  has  been  injured  in  the  past  by 
lack  of  persistent  effort  to  hold  markets  already  gained.  Ameri- 
can producers  are  urged  not  to  abandon  or  lose  interest  in  their 


136       FOREIGN  TRADE  MARICETS  AND  METHODS 

foreign  trade  because  it  shows  no  profit  for  the  moment  and  to 
remember  that  in  many  eases'  it  will  cost  much  more  to  regain  in 
the  future  a  business  lost  now  through  lack  of  courage  and  fore- 
sight. 

The  vast  market  which  the  United  States  offers  to  other  nations 
on  a  basis  of  equality,  and  the  supplies  of  American  raw  material 
exported  without  taxation  or  discrimination,  entitle  the  American 
export  and  import  trade  to  equality  of  treatment  in  all  foreign 
markets. 

To  insure  such  equality  of  treatment  that  American  tariff 
whatever  its  underlying  principle,  should  provide  for  additional 
duties  on  imports  from  nations  discriminating  by  tariffs  or 
administrative  practices  against  the  trade  of  the  United  States. 

A  most  crucial  necessity  exists  for  a  strong,  competent 
and  well-informed  leader  of  our  merchant  marine  activi- 
ties, a  man  with  authority  to  act.  We  have  had  quite 
enough  of  talk  and  theory  spinning.  As  an  old  college 
professor  once  said  to  a  hesitating  student: 

Your  greatest  need  at  present  is  to  go  ahead  and  do  some- 
thing. 

Public  sentiment  has  been  aroused;  now  let  it  be  capi- 
talized in  definite  action. 

One  of  the  requirements  of  the  American  nation  just 
now  is  a  man  of  achievement,  big  in  vision  and  capable 
by  experience  to  focus  his  theories  upon  a  definite  line  of 
action,  which  we  believe  the  country  is  ready,  as  never 
before,  to  support. 

The  period  of  theoretical  education  is  drawing  to  an 
end;  both  within  and  without  the  U.  S.  Shipping  Board 
we  have  experienced  quite  enough  of  errors  of  inefficiency ; 
under  the  guidance  of  clearly  defined  business  principles 
and  policies  the  nation  must  now  launch  out  into  maritime 
life  or  be  satisfied  to  slip  back  into  its  former  isolated 
nonmaritime  condition.  No  one  believes  that  we  can  or 
will  do  this,  but  the  necessity  is  insistent  upon  the  nation. 

But  behind  the  scenes  the  plan  for  world  readjustment 
is  being  worked  out — here  and  there  we  see  indications 


AMERICAN  SHIPPING  137 

of  better  days  in  changed  and  better  trade  relations,  for 
us  in  these  cloudy  days  to  have  the  courage  of  our  con- 
victions, to  retain  the  good  sense  of  our  better  judgment, 
and  by  exercise  and  application  of  the  principles  of 
cooperative  effort  prepare  for  the  day  when  the  clouds 
shall  clear  away  and  we  shall  stand  in  the  forefront  of 
the  nations  controlling  the  commerce  of  the  world. 

The  Disarmament  Conference  which  is  being  held  in 
Washington  as  this  book  is  going  to  press  gives  promise 
of  action  which  will  affect  favorably  the  American  mer- 
chant marine  and  with  the  sympathetic  attitude  of  the 
present  administration  to  our  national  shipping,  it  is 
sincerely  hoped  that  many  of  the  problems  which  have 
confronted  our  maritime  business  may  meet  with  satisfac- 
tory solution. 


CHAPTER  VIII 

MARINE  INSURANCE 

Insurance  furnished  by  competitors  can  be  used  to  comb  the 
profits  out  of  any  trade. — Henry  Evans. 

Among  the  instrumentalities  to  promote  and  conduct 
foreign  trade,  the  three  vital  factors,  shipping,  banking 
and  insurance,  must  be  carefully  studied  by  the  manu- 
facturer or  exporter.  The  history  of  overseas  business, 
in  Great  Britain  and  Germany  particularly,  reveals  the 
fact  that  it  is  through  the  successful  union  of  these  three 
factors  that  trade  success  is  achieved.  A  study  of  these 
nations  will  also  convince  the  student  that  it  is  extremely 
important  for  a  nation  doing  foreign  business  to  control 
each  one  of  these  agencies  rather  than  depend  upon 
foreign  nations  either  for  sMps,  banl^s  or  insurance.  It 
is  too  much  for  human  nature  to  expect  that  any  com- 
petitor nation  will  treat  American  exporters  with  the 
same  consideration  that  they  would  treat  their  own 
citizens  or  subjects. 

It  becomes,  therefore,  a  part  of  the  patriotic  duty  of 
Americans  to  care  for  and  maintain  the  interest  of  the 
American  marine  underwriter. 

Marine  insurance  has  for  its  objective  the  distribution 
amongst  a  number  of  individuals  losses  which  might  be 
difficult  for  any  one  of  them  to  bear  singly.  The  idea 
has  evolved  considerably  since  its  beginning  in  the  twelfth 
and  thirteenth  centuries  amongst  the  then  flourishing 
Italian  republics,  and  there  has  arisen  the  marine  under- 
writer whose  business  it  is  to  serve  the  needs  of  the  insur- 
ing public,  and  to  see  to  it  that  the  various  members  of 

138 


MARINE  INSURANCE  139 

that  public  are  charged  with  their  proper  cost  of  pro- 
tection. 

The  purpose  of  the  marine  insurance  company  is  to 
give,  in  the  first  place,  absolute  and  unquestioned  pro- 
tection to  all  persons  liable  to  suffer  loss  through  perils 
of  the  seas;  second,  when  such  loss  occurs  to  pay  what- 
ever loss  the  insured  has  sustained;  and,  third,  to  adjust 
the  cost  of  this  protection  that  it  shall  not  be  excessive 
as  a  whole,  nor  shall  any  one  man  pay  more  than  his 
fair  share. 

Ocean  carriers  are  in  a  somewhat  different  case  as  far 
as  risks  are  concerned  than  are  the  railroads.  Both  by 
law  and  also  by  the  contract  provisions  of  their  bills  of 
lading,  they  have  a  greatly  limited  liability.  The  Harter 
Act,  which  was  passed  by  Congress  in  1893,  fixes  the  obli- 
gations of  a  steamship  company  in  the  United  States.  In 
this  act  it  is  stated  that: 

If  the  owner  of  any  vessel  transporting  merchandise  or  prop- 
erty to  or  from  any  poxi;  in  the  United  States  of  America  shall 
exercise  due  diligence  to  make  the  said  vessel  in  all  respects 
seaworthy  and  properly  manned,  equipped,  and  supplied,  neither 
the  vessel,  her  owner,  or  owners,  agent,  or  charterers  shall 
become  or  be  held  responsible  for  damage  or  loss  i-esulting  from 
faults  or  errors  in  navigation  or  in  the  management  of  said 
vessel,  nor  shall  the  vessel,  her  owner  or  owners,  charterers, 
agent,  or  master  be  held  liable  for  losses  arising  from  damages 
of  the  sea  or  other  navigable  waters,  acts  of  God,  or  public 
enemies,  or  the  inherent  defect,  quality,  or  vice  of  the  thing 
carried,  or  from  insufficiency  of  package,  or  seizure  under  legal 
process,  or  for  loss  resulting  from  any  act  or  omission  of  the 
shipper  or  owner  of  the  goods,  his  agent  or  representative,  or 
from  saving  or  attempting  to  save,  Hfe  or  property  at  sea,  or 
from  any  deviation  in  rendering  such  service. 

In  order  to  give  a  concrete  idea  of  the  common  insurance 
clauses  in  use,  we  are  taking  the  liberty  to  present  the  views 
and  explicit  definitions  of  Mr.  Edward  R.  Hughes,  who  for 
many  years  has  specialized  in  connection  with  the  insurance 
of  merchandise. 


140       FOREIGN  TRADE  MARKETS  AND  METHODS 

F.  P.  A.  E.  C. 

(Free  of  particular  average  English  conditions) 

Warranted  free  from  P.  A.  unless  general,  or  the  sMp  be 
stranded,  sunk,  burnt,  on  fire  or  in  collision. 

When  goods  are  insured  with  this  clause  underwriters 
are  not  responsible  for  partial  damage  (particular  average) 
unless  one  of  the  above  accidents  occurs,  thereby  breaking 
the  warranty.  Should  the  warranty  be  broken  then  any 
loss  or  damage  is  recoverable  irrespective  of  percentage. 
A  policy  accepted  with  these  conditions  should  also  carry 
a  clause  providing  for  payment  of  goods  totally  lost  (case 
and  contents)  during  shipment,  transshipment  or  discharge. 

«W.  A.,"  «S.  P.  A.,"  "F.  P.  A.,  3%" 

All  goods  shipped  under  deck  (except  as  hereinafter  specially 
provided  for)  are  covered:  free  of  average  under  three  per  cent, 
unless  general  or  the  vessel  be  stranded,  sunk,  burnt,  on  fire  or 
in  collision;  each  interest  and/or  each  invoice  to  be  considered 
as  if  separately  insured,  and  average  payable,  if  required,  on  the 
whole  or  on  each  invoice,  or  on  each  description  of  goods  therein, 
or  in  series  in  order  of  invoice  as  follows : 

(Here  follows  the  description  of  goods  and  the  series  on 
which  underwriters  agree  to  pay  claims.) 

The  terms  "with  average,"  "Subject  to  Particular 
Average,"  "Free  of  Particular  Average  unless  amounting 
to  three  per  cent"  are  merely  different  ways  of  stating 
that  underwriters  will  pay  for  partial  loss  due  to  a  peril 
insured  against,  provided  the  damage  amounts  to  three 
per  cent  franchise.  It  should  be  understood,  however, 
that  in  case  of  general  average  or  the  vessel  be  stranded, 
etc.,  any  loss  occasioned  by  sea  peril  is  collectible  irrespec- 
tive of  percentage. 


MARINE  INSURANCE  141 


"ON  DECK" 

Shipments  on  deck:  Warranted  free  of  particular  average 
unless  the  vessel  be  stranded,  sunk,  burnt,  on  fire  or  in  collision, 
but  including  risk  of  jettison  and  washing  ovei-board,  irrespec- 
tive of  percentage. 

Unless  the  warranty  is  broken  underwriters  are  not 
liable  for  damage  unless  an  entire  package  (case  and  con- 
tents) is  washed  overboard  or  jettisoned. 

The  clauses  referred  to  above  are  those  most  commonly 
used,  but  the  nature  of  the  goods  shipped  is  the  factor 
in  determining  what  form  should  apply.  For  instance, 
fruit  and  vegetables  (perishable  of  their  own  nature), 
cement,  steel  goods  and  such  like  merchandise,  which  are 
liable  to  particular  average,  are  usually  only  written  on 
F.  P.  A,  terms,  while  dry  goods,  shoes  and  case  goods  of 
nearly  every  description  are  insured  "Subject  to  Par- 
ticular Average  if  amounting  to  3%  on  each  case  or  ship- 
ping package." 

Underwriters'  Responsibility. — It  is  somewhat  difficult 
to  put  into  condensed  form  to  what  extent  the  policy 
covers,  but  for  ordinary  purposes  of  claim  it  is  generally 
assumed  that  loss  caused  by  sea  water  is  collectible  when 
insured  S.  P.  A.  provided  the  damage  amounts  to  the  per- 
centage mentioned  in  the  policy.  On  the  other  hand, 
unless  special  insurance  has  been  taken  out  at  an  enhanced 
premium,  damage  due  to  breakage,  leakage,  fresh  water 
and  oil  stains  are  not  collectible  unless  there  is  direct 
evidence  that  the  damage  was  caused  by  stranding  or 
collision. 

Carriers'  Responsibility. — When  the  carrier  issues  a  bill 
of  lading  on  merchandise  without  a  notation  of  any  dam- 
age, he  is  in  duty  bound  to  deliver  in  like  good  order  and 
condition  as  received,  unless  he  can  show  that  the  damage, 
has  been  occasioned  by  a  peril  of  the  sea,  for  which 
damage  he  is  exonerated  under  the  terms  and  conditions 
of  the  bill  of  lading;  and  when  goods  are  discharged 


142       FOREIGN  TRADE  MARKETS  AND  METHODS 

and  before  taking  delivery,  if  any  damage  is  found,  claim 
should  be  made  in  writing  to  the  steamship  agents  in  order 
to  give  them  an  opportunity  of  examining  the  goods  if 
they  so  wish  before  removal  from  their  custody.  This 
procedure  in  no  way  invalidates  any  claim  which  might 
be  made  under  the  terms  of  the  insurance  policy,  for  the 
assured,  under  what  is  known  as  the  "Sue  and  Labor 
Clause,"  is  in  duty  bound  to  protect  the  interests  of 
underwriters, 

WareJiouse  to  Warehouse. — Goods  should  be  covered  from 
the  point  of  origin  until  delivered  at  destination,  and  the 
following  clause  is  used  in  the  policy  of  a  large  American 
trading  house: 

Insurance  under  this  policy  is  to  attach  from  the  moment 
goods  are  at  risk  of  the  assured  at  initial  point  of  shipment, 
while  in  course  of  transportation  whether  waterbome  or  not,  and 
covers  continuously  thereafter  until  the  goods  are  delivered  into 
store,  warehouse  or  factory  or  the  risk  of  the  assured  is  tei'm- 
inated  whichever  first  occurs,  at  final  point  of  destination,  includ- 
ing risk  of  inland  transportation,  and  whilst  awaiting  shipment 
or  deliveiy  on  docks,  wharves,  quays,  in  lighters,  go-downs,  ware- 
houses, custom  house  deposits  and/or  appraiser's  stores. 

To  west  coast  South  American  ports:  Covering  while  on 
docks  and/or  in  warehouses  or  stores  of  the  consignees  or  in 
the  Custom  House  and/or  Custom  House  Deposits  at  destination 
but  not  to  exceed  ten  (10)  days  in  all  after  discharge  from 
lighter. 

On  goods  destined  for  interior  places  and  insured  thereto 
hereunder,  this  policy  covers  in  terms  hereof  until  such  goods 
are  safely  delivered  into  warehouse  or  store  of  consignee  at  such 
interior  places. 

It  must  be  borne  in  mind  that  underwriters  only  cover 
the  goods  while  they  are  in  the  usual  course  of  transit  and 
if,  for  any  reason  other  than  perils  insured  against,  the 
transit  is  stopped,  special  insurance  should  be  placed  until 
they  continue  to  go  forward. 

Special  Risks. — Theft,  pilferage,  short  delivery  by  vessel, 
leakage,  breakage  (unless  caused  by  a  marine  peril)  and 


MARINE  INSURANCE  143 

damage  due  to  fresh  water  and  stains  are  not  ''perils  of  the 
sea"  and  underwriters  are  not  liable  unless  they  agree  to 
cover  such  risks  for  an  additional  premium.  Owing  to  the 
abnormal  losses  due  to  pilferage  many  companies  refuse  to 
insure  such  risks  at  any  figure;  consequently,  unless  con- 
signees jointly  bring  pressure  to  bear  on  their  local  authori- 
ties to  remedy  conditions,  they  must  be  prepared  to  shoulder 
the  burden  themselves.  It  would  be  the  best  for  all  con- 
cerned if  every  underwriter  would  refuse  to  grant  theft 
insurance,  in  which  case  consignees  would  have  no  alterna- 
tive but  to  agitate  for  punishment  of  the  guilty  instead  of 
paying  an  additional  premium  in  order  not  to  be  bothered. 

"Perils  of  the  sea"  do  not  include  damage  due  to  rain 
during  loading  or  discharge  or  while  left  exposed  on  shore 
or  docks.  Such  losses  are  preventable  and  are  only  due 
to  lack  of  proper  precaution. 

Abandonment. — It  should  be  clearly  understood  that 
merchandise  is  always  for  account  of  the  assured  until  the 
insurance  company  agrees  to  accept  abandonment,  con- 
sequently, the  insured  should  safeguard  the  goods  just  as 
though  no  insurance  policy  had  been  taken  out.  Some 
merchants  believe  that  the  moment  goods  are  damaged  they 
are  for  account  of  the  underwriters.  This  is  most  decidedly 
not  true. 

Claims. — In  the  event  of  loss  or  damage  by  a  sea  peril 
underwriters  will  require  the  following  documents:  copy 
of  Captain's  protest  or  certificate  issued  by  a  representative 
of  the  New  York  Board  of  Marine  Underwriters,  National 
Board  of  Marine  Underwriters,  or  Lloyd's  Agent;  copy  of 
bill  of  lading;  copy  of  original  commercial  invoice,  and 
insurance  ceilificate,  unless  it  is  a  total  loss,  then  under- 
writers require  all  original  documents. 

The  underwriter  under  a  particular  average  adjustment 
on  cargo  is  only  liable  for  his  proportion  which  the  dif- 
ference between  the  sound  and  damaged  arrived  values 
bears  to  the  sound  value,  which  proportion  applied  to  the 
insured  value  gives  the  amount  due  by  underwriters,  plus 
the  expenses  of  proving  the  loss.     The  underwriter  is  not 


144      FOREIGN  TRADE  MARKETS  AND  METHODS 

liable  for  any  loss  on  duty  unless  there  is  a  specific  insur- 
ance effected,  and  if  such  is  the  case  he  is  liable  for  the 
same  percentage  of  loss  on  the  insured  value  of  the  duty 
as  is  shown  on  the  merchandise. 

Complaints  are  occasionally  received  that  the  insurance 
companies  are  seeking  to  avoid  payment  of  just  claims, 
but  the  writer's  experience  over  a  number  of  years  is  that 
the  companies  are  always  ready  to  pay  legitimate  claims 
and  frequently  pay  when  there  is  more  than  a  reasonable 
doubt  of  their  responsibility,  but  they  certainly  cannot  be 
expected  to  make  good  for  the  fault  of  others.  The  tend- 
ency to  claim  against  the  insurance  companies  for  every 
description  of  loss  irrespective  of  the  cause  of  damage  is 
to  be  deprecated.  An  energetic  position  taken  by  the  con- 
signees on  receipt  of  damaged  or  pilfered  merchandise 
would,  in  many  cases,  result  in  a  settlement  by  the  proper 
parties,  whereas  if  the  claim  is  simply  made  against  under- 
writers as  a  matter  of  course,  it  frequently  develops  that 
the  loss  was  not  occasioned  by  a  peril  insured  against  and 
the  claim  is  rejected,  leaving  the  client  with  no  recourse 
except  to  write  off  the  loss. 

There  are  perhaps  few  subjects  connected  with  foreign 
trade  about  which  so  little  is  specifically  known  on  the  part 
of  foreign  shippers  and  manufacturers,  but  unless  marine 
insurance  takes  its  place  among  the  other  factors  of  ship- 
ping and  banking,  our  foreign  commerce  will  experience 
a  very  great  leakage,  and  American  shipowners  particularly 
will  find  their  competitive  efforts  with  foreign  concerns 
even  more  difficult.  There  should  be  cooperative  measures 
between  banking,  shipping  and  insurance  which  will  furnish 
facilities  capable  of  supplying  the  needs  of  our  national 
interests  in  the  colossal  struggle  just  before  us  for  the 
world's  trade.  With  a  new  power  of  shipping  and  banking 
service,  the  United  States  should  also  give  its  attention  to 
obtaining  a  sufficient  marine  protection  controlled  in  this 
country  to  make  possible  an  enlarging  confidence  on  the 
part  of  shippers. 

There  is  no   doubt  but   that  Great  Britain   has  com- 


MARINE  INSURANCE  145 

manded  the  foreign  trade  of  the  world  largely  because  she 
has  been  able  to  finance  it  herself,  carry  it  in  her  own  ships, 
and  protect  both  her  credit  and  her  losses  by  insuring  prac- 
tically every  dollar  of  her  own  trade  with  her  own  insur- 
ance. Before  the  war  Germany  was  rapidly  gathering  her 
strength  by  the  proper  coordination  of  these  three  great 
elements  in  overseas  business.  Our  American  commerce 
abroad  will  be  largely  dependent  upon  the  way  upon  which 
we  are  able  to  follow  the  example  of  our  great  trade  com- 
petitors, adapting  our  policies  and  our  methods  to  suit  our 
peculiar  national  products  and  possessions. 


CHAPTER  IX 
CABLES— THE    NERVES   OF   FOREIGN   TRADE 

There  are  four  great  facilities  of  Foreign  Trade — ships, 
banks,  marine  insurance,  and  cable  and  telegraph  services. 
Lacking  any  one  of  these  a  nation  is  severely  handicapped 
in  contesting  with  other  countries  for  markets  and  business 
abroad. 

There  are  those  who  believe  that  before  long  a  fifth 
and  possibly  a  sixth  great  instrumentality  for  commerce 
will  arrive  having  an  important  bearing  upon  the  develop- 
ment and  extension  of  both  shipping  and  oceanic  cables, 
namely,  the  wireless  and  the  aeroplane  or  dirigible. 
As  yet  neither  of  these  latter  instrumentalities  competes 
seriously  with  either  cable  communications  or  transporta- 
tion by  ships,  but  the  great  amount  of  scientific  study, 
together  with  money  expended  upon  wireless  stations  leads 
the  exporter  to  hope  for  the  arrival,  at  no  far  distant  date, 
of  a  day  when  the  air  will  contain  both  messages,  men  and 
merchandise,  passing  from  continent  to  continent,  annihi- 
lating spacial  and  geographic  distances  and  making  the 
world  of  trade  one. 

While  it  is  not  seriously  contended  that  radio  telegraphy 
will  replace  the  telegraph  and  cable  systems,  it  supplies  a 
most  valuable  supplement  to  present  cable  facilities.  By 
radio  it  is  possible  to  provide  direct  telegraphic  communcia- 
tion  with  centers  which  cannot  be  reached  by  cable,  either 
because  of  geographical  position  or  due  to  present  prohibi- 
tive cost  of  new  cable  lines.  The  same  conditions  govern- 
ing the  acceptance  of  messages  apply  via  radio  as  via  cable. 
The  same  codes  used  in  one  service  may  be  used  with  equal 
facility  in  the  other.    The  same  registered  addresses  used 

146 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       147 

for  cable  communication  are  available  for  radio  messages. 
American  commerce  now  has  at  its  disposal  more  complete 
facilities  for  international  radio  communication  than  are 
available  to  the  business  interests  of  any  other  country. 

The  radio  has  been  found  an  effective  substitute  in  place 
of  cable  communication  when  abnormal  activity  causes  con- 
gested conditions  in  transmission  of  messages.  Due  to  the 
war,  which  tied  up  both  Atlantic  and  Pacific  cable  lines 
with  a  great  mass  of  messages,  the  radio  has  proved  its 
importance  of  caring  for  a  large  traffic  of  commercial  mes- 
sages. However,  the  cable  at  present  has  features  of  secrecy, 
certainty  and  accuracy,  which  present  strong  points  in  its 
favor. 

A  permanent  cable  was  laid  across  the  Atlantic  in  1866 
and  from  this  beginning  there  has  been  a  remarkable 
development,  until  at  the  end  of  1920  there  were  3052 
submarine  cables  in  operation  having  an  aggregate  length 
of  298,085  nautical  miles.  While  the  war  stopped  the  de- 
velopment of  cable  laying  almost  entirely,  there  has  been 
recently  an  enlargement  of  interest  on  the  part  of  several 
nations  interested  in  foreign  trade  and  the  facilities  which 
the  cable  system  offers  therefor. 

When  it  is  considered  that  according  to  the  Department 
of  Commerce  almost  85  per  cent  of  our  total  trade  with 
the  Far  East  is  transacted  by  cable  and  in  consideration 
of  the  vast  amount  of  business  with  Latin  America  de- 
pendent upon  cable  service,  a  knowledge  of  this  subject 
becomes  indispensable  to  those  interested  in  foreign  trade. 

Of  these  submarine  cables  noted  above — 532  privately 
owned  with  a  length  of  over  262,000  miles,  and  2628  gov- 
ernment owned  with  a  length  of  nearly  56,000  miles — 
nearly  50  per  cent  are  in  the  hands  of  British  interests. 

Cables  radiate  from  England's  shores  to  all  points  of  the 
globe.  Great  Britain  is  connected  with  the  continent  of 
Europe  by  twenty-two  government  cables ;  eight  to  France ; 
three  to  Belgium;  three  to  Holland;  six  to  Germany;  and 
two  to  Norway.  These  cables,  with  the  exception  of  those 
formerly  belonging  to  Germany,  are  worked  jointly  by  the 


148       FOREIGN  TRADE  MARKETS  AND  METHODS 

British,  French,  Belgian,  Dutch  and  Norwegian  govern- 
ments and  are  the  chief  means  of  communication  between 
Great  Britain,  Central  Europe  and  Norway. 

An  extensive  and  complex  set  of  cables  places  Great 
Britain  in  touch  with  Canada  and  the  United  States.  The 
Commercial  Cable  Company  (U.  S.)  operates  four  trans- 
atlantic cables  from  Waterville,  Ireland,  and  the  Western 
Union  Telegraph  Company  (U.  S.)  operates  eight — four 
from  Valentia,  Ireland,  and  four  from  Penzance,  England. 
The  Western  Union  is  also  constructing  a  short  cable  to 
connect  Ireland  with  England.  These  two  companies  are 
American  owned. 

Cable  Construction. — The  making  of  a  cable,  especially 
the  ability  to  secure  the  materials  entering  into  its  con- 
struction, is  a  somewhat  vital  matter  in  connection  with 
the  expansion  of  this  means  of  communication.  To  quote 
from  an  article  in  World's  Markets  written  by  John  L. 
Brinda,  the  following  facts  give  a  general  idea  of  cable 
construction : 

The  core  of  the  cable  consists  of  strands  of  copper  wire  covered 
first  with  several  coatings  of  gutta-percha  and  then  with  a  thick 
coat  of  wet  jute,  yam  or  hemp  for  protection  and  insulation. 
Sometimes  the  core  is  inclosed  in  a  thin  layer  of  brass  tape  for 
special  protection.  The  core  is  finally  inclosed  in  a  cover  made 
from  galvanized  iron  or  steel  wire  each  separate  wire  covered 
■with  a  mixture  of  gutta-percha,  resin  and  Stockholm  tar  known 
as  Chatterton's  compound.  Tarred  tape  is  then  used  to  cover 
the  whole  cable. 

Although  some  cables  have  been  constructed  with  rubber  in 
lieu  of  gutta-percha,  they  have  not  proven  satisfactory  and  gutta- 
percha still  remains  the  best  known  material  for  this  particular 
use.  The  principal  source  of  gutta-percha  is  the  Malay  Archi- 
pelago, and  British  interests  have  controlled — through  their  con- 
nection with  Chinese  traders  and  otherwise — the  major  portion 
of  the  world's  supply.  It  is  expected  that  the  development  of 
gutta-percha  growing  in  the  Philippines  will  sooner  or  later 
make  America  free  of  the  necessity  of  depending  on  the  British. 
The  most  significant  fact,  however,  is  that  practically  all  sub- 
marine cables  must  be  constructed  in  England  as  no  other  country 
has  developed  a  cable  manufacturing  industry  of  any  importance. 


CABLES— THE  NERVES  OF  FOREIGN  TRADE   149 

There  is  only  one  line  operated  by  an  American  company 
to  the  great  markets  of  the  Far  East.  This  is  the  only 
American  cable  with  one  exception  having  landing- 
stations,  other  than  those  on  the  mainland  of  the 
United  States,  on  American  territory.  The  cables  of  the 
All  America  system  touch  American  territory  at  the 
Panama  Canal  Zone,  at  Guantanamo  Bay  (U.  S.  Naval 
Station)  Cuba,  and  also  Porto  Rico.  Although  Great 
Britain  controls  44  per  cent,  or  133,328  nautical  miles 
of  the  world's  submarine  cables,  the  landing  stations 
at  both  ends  of  nearly  all  these  cables  are  on  British  soil ; 
while  the  United  States  with  21  per  cent  or  63,933  nautical 
miles,  does  not  control  the  landing  stations  at  both  ends 
of  the  cable,  with  the  exception  of  that  of  the  Commercial 
Cable  Company  to  the  Philippines  and  All  America  to 
Porto  Rico  and  to  the  Canal  Zone.  This  indicates  a 
dominant  reason  for  Great  Britain's  present  cable  leader- 
ship. Her  ownership  of  countries  and  islands  liberally 
scattered  over  the  face  of  the  world  makes  possible  owner- 
ship and  control  at  both  ends  of  many  of  her  cables,  and 
moreover  obviates  to  a  large  extent  the  difficulty  and  delay 
of  securing  landing  privileges  for  new  cable  projects. 

Inter-American  Cables. — Inter-American  Cable  facilities 
may  be  divided  into  three  groups — those  wliich  connect 
the  U.  S.  with 

a.  Mexico,  Central  America  and  the  West  Indies. 
h.  The  West  Coast  of  South  America, 
c.  The  East  Coast  of  South  America. 

The  few  cable  connections  between  the  West  Indies 
and  northern  South  America  (Venezuela  and  the  Guianas) 
may  be  included  in  this  latter  group. 

For  some  time  past  All  America  Cables  have  adequately 
served  the  first  two  fields;  the  third  has  been  served 
largely  by  British  interests  until  the  recent  extensions 
of  the  All  America  system  to  Santos  and  Rio  de  Janeiro 
by  way  of  Buenos  Aires  and  Montevideo.  Messages  be- 
tween New  York  and  Buenos  Aires  are  handled  with- 


150       FOREIGN  TRADE  MARKETS  AND  METHODS 

out  retransmission  by  hand,  that  is,  by  purely  automatic 
methods,  a  distance  of  7452  miles,  in  less  than  fifteen 
minutes.  All  America  Cables  contemplate  making  a  com- 
plete circuit  of  the  continent  of  South  America. 

Cuba. — The  island  is  served  by  All  America  Cables  from 
New  York;  by  the  Western  Union  Telegraph  Company 
with  triplicate  cables  between  Key  West  and  Havana;  by 
the  Commercial  Cable  Company  from  New  York  to 
Havana;  by  the  United  States  &  Haiti  Telegraph  &  Cable 
Company  with  a  single  cable  from  New  York  to  Cape 
Haitien,  where  it  connects  with  the  lines  of  the  Compagnie 
Frangaise  des  Cables  Telegraphiques ;  locally  by  the  Cuba 
Submarine  Telegraph  Company,  landings  being  made  at 
points  along  the  southern  coast  of  Cuba.  The  cables  of 
the  West  India  and  Panama  Telegraph  Company  begin  at 
Santiago,  Cuba,  and  extend  to  Jamaica,  Porto  Rico,  Vir- 
gin Islands,  St.  Kitts,  Antigua,  Guadeloupe,  Dominica,  St. 
Lucia,  St.  Vincent,  Barbados,  Grenada,  Trinidad  and 
British  Guiana.  This  Company  and  the  Cuba  Submarine 
Telegraph  Company  connect  with  Cable  Companies  serv- 
ing places  north  and  south  of  Cuba. 

Porto  Rico. — The  island  is  served  from  New  York  di- 
rectly by  All  America  Cables,  Inc. ;  from  New  York  by  the 
United  States  and  Haiti  Telegraph  and  Cable  Company 
via  Haiti  and  the  French  West  Indies  system;  by  the 
Western  Union  Telegraph  Company  via  Havana,  the  Cuba 
Submarine  Telegraph  Company,  and  the  West  India  and 
Panama  Telegraph  Company.  Messages  may  also  be  sent 
via  All  America  Cables,  Inc.,  and  the  U.  S.  Naval  Wireless 
from  Guantanamo,  Cuba,  as  well  via  All  America  Cables 
and  West  India  and  Panama  Telegraph  Company  from 
Santiago,  Cuba. 

Haiti  and  San  Domingo. — Haiti  is  connected  with  New 
York  by  the  cables  of  United  States  and  Haiti  Telegraph 
&  Cable  Company  at  Cape  Haitien.  It  also  receives  com- 
munications by  wireless  from  the  cables  of  the  All  America 
Cables  via  the  wireless  system  of  the  United  States  Naval 
Communications  service  at  Guantanamo  Bay,  Cuba.     This 


CABLES— THE  NERVES  OF  FOREIGN  TRADE   151 

wireless  service  also  reaches  San  Domingo.  The  latter 
country  is  reached  in  addition  by  the  Western  Union  Tele- 
graph Company  through  connections  at  Havana  with  the 
Cuba  Submarine  Telegraph  Company  and  the  French  Tele- 
graph Company  as  well  as  by  the  wireless  service  of  the 
Guanica  Centrale  from  Porto  Rico.  San  Domingo  may 
likewise  be  reached  over  the  lines  of  the  United  States  & 
Haiti  Telegraph  &  Cable  Company  from  New  York  City. 

The  Virgin  Islands. — All  America  Cables,  Inc.,  connect- 
ing at  Santiago,  Cuba,  and  at  Porto  Rico  with  the  West 
India  and  Panama  Telegraph  Company  or,  at  Guantanamo, 
Cuba,  with  the  U.  S.  Naval  Communication  Service,  serve 
St.  Thomas  and  St.  Croix.  These  places  may  also  be 
reached  via  the  Western  Union  Telegraph  Company 
through  connections  at  Havana  with  the  Cuba  Submarine 
Telegraph  Company  which,  in  turn,  connects  at  Santiago, 
Cuba,  with  the  West  India  and  Panama  Telegraph  Com- 
pany; as  well  via  the  lines  of  the  Halifax  and  Bermuda 
Cable  Company,  the  Direct  West  India  Cable  Company, 
and  the  West  India  and  Panama  Telegraph  Company. 
Guadeloupe  is  reached  from  New  York  via  the  French 
Cable  Company,  also  via  All  America  Cables,  Inc.,  con- 
necting with  the  West  India  and  Panama  Telegraph  Com- 
pany. Messages  may  also  be  sent  via  the  Western  Union 
Telegraph  Company  and  Commercial  Cable  Company  via 
Havana, — Cuba  Submarine  Telegraph  Company — ^West 
India  and  Panama  Telegraph  Company. 

List  of  Cable  Companies  Affording  Cable  Facilities  in 
Latin  America. — The  following  list  gives  in  alphabetical 
order  the  various  companies  affording  cable  facilities  in 
Latin  America,  with  special  reference  to  connections 
between  the  United  States  and  Latin  America : 

1.  All  America  Cables,  Inc. — This  system  is  operated 
jointly  by  the  Mexican  Telegraph  Company  and  the  Cen- 
tral and  South  American  Telegraph  Company.  On  Dec. 
31st,  1920,  All  America  Cables  owned  (not  leased)  over 
26.000  miles  of  cable  and  land  lines. 

The  All  America  Cables  system,  which  knits  together  the 


152       FOREIGN  TRADE  MARKETS  AND  METHODS 

United  States,  Mexico,  Central  and  South  America  with 
its  service  of  over  23,000  nautical  miles  of  cable,  was  con- 
ceived, financed,  and  is  directed  by  purely  American  inter- 
ests. 

All  America  Cables,  Inc.,  is  operated  jointly  by  the 
Mexican  Telegraph  Company  established  in  1879,  and  the 
All  America  Cables,  Inc.  (formerly  called  the  Central  and 
South  American  Telegraph  Company),  established  in  1881. 
This  system  is  said  to  hold  the  world's  record  for  speed 
in  transmission  and  accuracy  in  service  and  no  money  is 
spared  in  the  endeavor  to  make  it  the  best  system  in  the 
world. 

Wlien  this  system  first  entered  Buenos  Aires  the  rate 
was  $7.50  per  word.  To-day  the  rate  to  Buenos  Aires  by 
these  cables  is  50  cents  per  word.  The  last  reduction  to 
fifty  cents  was  effected  by  the  company  on  December  1, 
1917,  and  the  announcement  of  such  a  radical  reduction 
in  the  cost  of  cabling,  at  a  time  when  the  cost  of  every- 
thing was  mounting  higher  and  higher,  was  enthusiastically 
received  by  the  Governments  and  the  public  of  all  the 
Americas. 

The  completion  of  its  two  new  cables  to  Rio  de  Janeiro 
and  Santos  has  again  made  it  possible  for  this  enter- 
prising company  to  reduce  rates,  and  upon  the  opening 
of  its  offices  at  those  points  the  rate  was  immediately 
reduced  from  85  cents  to  65  cents  per  word,  and  a  still 
further  reduction  to  54  cents  per  word  was  made  on  July 
7,  1921.  Before  the  advent  of  the  Company's  cables  into 
Brazil  the  rate  had  remained  stationary  for  years.  Natur- 
ally such  a  progressive  policy  of  public  service  plays  a 
large  part  in  fostering  trade  relations,  and  a  closer  friend- 
ship between  the  American  republics. 

Principally  for  the  convenience  of  the  United  States 
Government,  and  the  Embassies  and  Legations  of  the  Cen- 
tral and  South  American  Republics,  the  company  has 
established  an  office  in  Washington,  D.  C,  thus  putting  the 
capital  of  the  nation  in  direct  telegraphic  touch  with  the 
nations  of  Latin  America. 


CABLES— THE  NERVES  OF  FOREIGN  TRADE   153 

All  America  Service  Lines. — The  All  America  Cables, 
Inc.,  system  is  composed  of  the  following  lines  of  com- 
munication, namely, 

"Via  All  America"  ("Via  Colon"  and  "Via  Galves- 
ton"). 

From  New  York  there  are  two  direct  duplex  cables  to 
Colon,  touching  at  Guantanamo,  Cuba.  An  extension  has 
been  made  to  Santiago  de  Cuba  and  a  direct  cable  has 
been  recently  laid  from  Cuba  to  Porto  Rico.  A  cable  has 
been  laid  from  Colon  to  Cartagena,  Colombia,  connect- 
ing with  the  main  line  of  the  system.  The  main  cable 
system  continues  across  the  Isthmus  of  Panama  by  means 
of  duplicate  underground  cables,  uniting  with  the  sub- 
marine cables  again  at  Panama  and  extending  down  the 
"West  Coast  as  far  as  Valparaiso. 

The  cables  at  Panama  are  also  joined  by  a  system  of 
cables  running  north  and  carrying  traffic  for  all  of  Cen- 
tral America,  the  company  having  its  offices  at  San  Juan 
del  Sur,  Nicaragua;  Libertad,  Salvador;  and  San  Jose, 
Guatemala.  Honduras  is  reached  through  Salvador,  and 
Costa  Rica  through  Nicaragua,  over  the  Government  tele- 
graphs. The  cables  south  of  Panama  serve  the  Republics 
of  Colombia,  Ecuador,  Peru  and  Chile. 

A  cable  also  has  recently  been  laid  from  Iquique  to 
Arica,  and  the  company  has  purchased  the  line  of  the 
Compania  de  Telegrafos  a  Bplivia,  which  extends  from 
Arica  by, way  of  Tacna  to  La  Paz,  the  Capital  of  Bolivia, 
thus  serving  the  whole  Republic  of  Bolivia. 

From  Valparaiso,  Chile,  the  lines,  triplicate,  extend 
across  the  Andes  to  the  City  of  Buenos  Aires  in  the 
Argentine ;  a  line  also  connects  Santiago  with  Valparaiso. 

The  company  has  installed  cables  between  Buenos  Aires 
and  Montevideo,  the  capital  of  Uruguay,  and  the  cables 
have  been  in  operation  since  June,  1920. 

Two  separate  cables  have  recently  been  laid  connect- 
ing Montevideo  with  the  cities  of  Rio  de  Janeiro  and 
Santos,  in  Brazil,  thus  offering  a  direct  all  American 
service  between  Brazil  and  the  United  States. 


154       FOREIGN  TRADE  MARKETS  AND  METHODS 

From  Galveston,  Texas,  there  are  triplicate  cables  to 
Vera  Cruz  and  Puerto,  Mexico  (Coatzacoalcos).  These 
cross  the  Isthmus  of  Tehuantepec  to  the  port  of  Salina 
Cruz  upon  the  Pacific  Coast,  and  from  thence  connect  at 
San  Jose,  Guatemala,  with  the  cables  above  described. 

This  route  to  Central  and  South  America  can  be  used 
to  assist  the  main  route  via  New  York  and  Colon  in  case 
of  congestion  on  that  section,  or  should  any  of  the  cables 
from  Panama  be  interrupted. 

From  Vera  Cruz,  there  is  a  duplicate  land  line  to  the 
City  of  Mexico.  Messages  to  and  from  Mexico  are 
received  from,  or  delivered  to,  connecting  lines  at  Galves- 
ton. 

Cartagena,  Colombia,  is  less  than  50  minutes  from  New 
York  by  All  America  Cables,  and  this  company  offers  a 
direct  connection  with  South  and  Central  America  with- 
out foreign  censorship  in  time  of  war. 

Mr.  James  A.  Scrymser,  an  American,  was  the  founder 
of  the  All  America  Cables  system  (1879).  In  1886,  the 
staff  of  the  home  office  occupying  one  floor  at  37  "Wall 
Street,  New  York,  was  composed  of  about  25  people.  To- 
day the  company  owns  its  own  building  at  89  Broad  Street 
and  employs  over  300  at  that  address.  The  company  is 
erecting  another  building  adjoining  its  present  property 
to  accommodate  its  growing  business. 

All  America  Cables  are  the  only  direct  means  of  cable 
communication  between  the  Americas  as  well  as  the  only 
American-owned  company. 

2.  Amazon  Telegraph  Company  (Ltd.). — This  company, 
whose  cables  have  been  in  use  since  1896,  owns  submarine 
cables  connecting  Para  and  Manaos  on  the  Amazon  Eiver, 
there  being  fourteen  intermediate  stations.  At  Para  the 
cable  joins  the  lines  of  the  Western  Telegraph  Com- 
pany. 

3.  Central  and  South  American  Telegraph  Company 
(All  America  Cables). 

4.  Commercial  Cable  Company  of  Cuba. — Cables  run 
from  New  York  to  Cuba. 


CABLES— THE  NERVES  OF  FOREIGN  TRADE   155 

5.  Compagnie  des  Cables  Snd-Amerieains. — This  com- 
pany operates  seven  cables,  with  a  total  length  of  3779 
nautical  miles.  The  principal  cable  extends  from  Dakar, 
Africa,  to  Pernambiieo,  Brazil.  At  Dakar  it  is  connected 
with  Brest,  France,  by  a  French  Government  cable. 

6.  Compagnie  Fran^aise  des  Cables  Telegraphiques. — 
Cables  of  the  company  connect  Cuba,  Haiti,  San  Domingo, 
Guadeloupe,  Martinique,  Curacao,  Dutch  and  French 
Guiana,  several  points  in  Venezuela  and  Salinas  on  the 
north  coast  of  Brazil.  The  company  owns  and  operates 
trans- Atlantic  cables  connected  with  its  Caribbean  system 
through  the  United  States  &  Haiti  Telegi-aph  &  Cable 
Company. 

7.  Compaiiia  Telegrafica-Telefonica  de  la  Plata. — This 
company  operates  one  cable,  extending  from  La  Plata, 
Argentina,  to  Colonia,  Uruguay. 

8.  Cuba  Submarine  Telegraph  Company. — Cables,  total- 
ing 1343  nautical  miles,  are  operated  by  this  company. 
Landings  are  made  at  numerous  points  along  the  coast  of 
the  island  of  Cuba. 

9.  Deutsch-Sudamerikanische  Telegraphengesellschaft. 
• — Before  the  war  this  company  operated  five  cables,  with 
a  total  length  of  7386  nautical  miles.  A  South  American 
Cable  from  Emden  (Germany)  via  the  Canaries  and  Mon- 
rovia, Liberia  (Africa),  landed  at  Pernambuco,  Brazil. 

10.  Direct  West  India  Cable  Company. — The  cables  of 
this  company  extend  from  Jamaica  to  Turks  Island  and 
from  Turks  Island  to  Bermuda. 

11.  Halifax  and  Bermuda  Cable  Company. — The  com- 
pany operates  a  cable  from  Halifax  to  the  island  of 
Bermuda. 

12.  Mexican  Telegraph  Company  (All  America  Cables). 

13.  Pacific  and  Eiu-opean  Telegi'aph  Company.  (Ltd.). 
— A  subsidiary  company  of  the  Western  Telegraph  Com- 
pany. It  operates  land  lines  between  Argentina  and 
Chile. 

14.  River  Plate  Telegraph  Company. — This  company 
operates  cable  lines  from  La  Plata,  Argentina  to  Colonia, 


156       FOREIGN  TRADE  MARKETS  AND  METHODS 

Uruguay,   and  from   Colonia,   Uruguay  to   Montevideo, 
Uruguay. 

15.  United  States  and  Haiti  Telegraph  and  Cable  Com- 
pany.— The  cable  facilities  consist  of  a  single  line  from 
New  York  to  Cape  Haitien,  Haiti.  It  is  operated  by  the 
Compagnie  FranQ.aise  des  Cables  Telegraphiques. 

16.  West  Coast  of  America  Telegraph  Company  (Ltd.). 
— A  subsidiary  company  of  the  "Western  Telegraph  Com- 
pany operating  cables  on  the  west  coast  of  South  America. 
It  connects  Callao  and  Mollendo,  Peru,  with  Arica, 
Iquique,  Antofagasta,  Coquimbo,  Valparaiso  and  Concep- 
cion,  Chile. 

17.  Western  Telegraph  Company  (Ltd.). — An  extensive 
cable  system  is  operated  by  this  company  between  Europe 
and  South  America,  especially  Brazil.  English  cables  via 
Ascension  Island  and  the  Cape  Verde  Islands  reach 
Buenos  Aires;  also  from  Lisbon  via  the  Azores  and  the 
Cape  Verde  Islands  to  Pernambuco,  Brazil.  Cables  ex- 
tend along  the  Brazilian  coast  from  Para  south,  touching 
at  Maranham,  Ceara,  Bahia,  Rio  de  Janeiro,  Santos,  Santa 
Catarina,  Rio  Grande  do  Sul,  Montevideo,  Uruguay  and 
La  Plata,  Argentina.  The  Western  Telegraph  Company 
recently  secured  permission  to  lay  a  cable  north  from 
Brazil  to  the  island  of  Barbados  and  planned  to  extend  this 
north  by  way  of  Bermuda  to  Halifax. 

18.  Western  Union  Telegraph  Company. — The  Western 
Union  Telegraph  Company  has  operated  cables  between 
Florida  and  Cuba  since  1875.  These  lines  are  mentioned 
above.  In  1918  a  concession  was  granted  this  company 
by  the  Brazilian  Government  to  lay  a  cable  from  Brazil 
to  one  of  the  islands  of  the  Greater  Antilles.  A  num- 
ber of  landings  were  possible  along  the  coast  of  Brazil 
— Nictheroy  (across  the  bay  from  Rio  de  Janeiro), 
island  of  Itaparica  (near  Bahia),  Aracaju,  Parahyba, 
Natal,  or  at  Para.  From  Para  the  cable  was  to  extend 
to  the  Antilles  station.  South  from  Nictheroy  the  cable 
Was  to  extend  to  Maldonado,  Uruguay  and  to  Buenos 
Aires,  Argentina. 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       157 

These  concessions,  however,  have  been  given  up,  and 
the  Western  Union  Telegraph  Company  plans  to  lay  an 
American  cable  to  the  island  of  Barbados,  wliich  cable 
will  then  utilize  the  cable  of  the  Western  Telegraph  Com- 
pany from  the  island  of  Barbados  to  Brazil. 

19.  West  India  and  Panama  Telegraph  Company. — The 
cables  of  this  company  connect  Cuba,  Jamaica,  Porto  Rico, 
Virgin  Islands,  St.  Kitts,  Antigua,  Guadeloupe,  Dominica, 
St.  Lucia,  St.  Vincent,  Barbados,  Grenada,  Trinidad  and 
British  Guiana. 

West  Coast  of  South  America — Additional  Facilities. — 
In  addition  to  the  service  of  the  cables  of  All  America 
Cables,  Inc.,  the  west  coast  of  South  America  is  served 
by  the  West  Coast  of  America  Telegraph  Company,  with 
offices  in  Peru,  Bolivia  and  Chile.  European  messages 
are  received  over  the  lines  of  the  Western  Telegraph 
Company,  with  which  the  West  Coast  of  America  Tele- 
graph Company  is  incorporated. 

Extensions  and  Improvements. — Brazil. — The  principal 
improvements  in  Brazil  are  in  connection  with  the  exten- 
sion of  the  cables  of  All  America  Cables'  lines  from  Mon- 
tevideo to  Santos  and  Rio  de  Janeiro,  Brazil,  and  their 
concession  from  the  Brazilian  Government  to  lay  lines 
direct  from  that  country  to  the  United  States;  also  the 
extension  of  the  AVestern  Union  Telegraph  Company  via 
Barbados. 

a.  On  October  23,  1919,  an  executive  decree  of  the 
President  of  Brazil  conceded  to  the  Central  &  South 
American  Telegraph  Company  (now  All  America  Cables) 
without  monopoly  or  privilege  of  any  kind  and  without 
subvention  from  the  Government  of  Brazil,  the  right  to 
lay  a  submarine  cable  to  connect  the  cities  of  Santos  and 
Rio  de  Janeiro  with  any  part  of  the  territory  of  Uruguay 
and  to  carry  out  telegraphic  communication.  A  cable  from 
Montevideo  was  landed  at  Rio  de  Janeiro  on  March  30, 
1920.  Permission  had  previously  been  obtained  from  the 
Government  of  Uruguay  to  lay  cables  from  Montevideo 
to  Buenos  Aires. 


158       FOREIGN  TRADE  MARKETS  AND  METHODS 

J).  The  President  of  Brazil  has  also  signed  a  decree 
granting  All  America  Cables,  Inc.,  the  right  to  lay  and 
operate  a  cable  from  Rio  de  Janeiro  to  Cuba,  to  run  by 
way  of  the  Island  of  Fernando  de  Noronha  (125  miles 
from  the  coast  of  Brazil,  northeast  from  Pernambuco). 

c.  The  Compagnie  des  Cables  Sud-Americains  waa 
recently  granted  permission  to  lay  a  cable  from  Rio  de 
Janeiro  to  Montevideo,  Uruguay,  and  from  there  to 
Buenos  Aires.  Permission  has  also  been  obtained  by  this 
company  to  take  up  its  cable  at  Pernambuco,  Brazil,  and 
to  land  the  cable  at  Rio  de  Janeiro,  with  a  view  to  cover- 
ing the  entire  cable  field  of  the  coast  of  Brazil. 

d.  The  extension  of  the  "Western  Union  Telegraph  Com- 
pany for  cable  service  between  the  United  States  and 
Brazil,  Uruguay,  and  Argentina  via  the  east  coast  is  dis- 
cussed above. 

By  decree  of  September  6,  1918,  the  President  of  Brazil 
declared  null  and  void  the  concession  granted  in  July, 
1908,  to  Felten  and  Guillaume-Lahmayerwerke  Aktien- 
gesellschaft,  of  Mulheim  on  the  Rhine,  and  later  trans- 
ferred to  the  Deutsch-Sudamerikanische  Telegraphen- 
gesellsehaft,  A.  G.,  to  establish  and  operate,  without 
monopoly,  an  ocean  telegraph  between  a  point  on  the 
coast  of  Brazil  and  the  island  of  Teneriffe. 

Chile. — The  Central  and  South  American  Telegraph 
Company  (All  America  Cables)  purchased  and  assumed 
control  and  operation  (February  15,  1920)  of  the  Com- 
pania  de  Telegraphos  a  Bolivia  which  had  maintained 
offices  in  Arica  and  Tacna,  Chile,  and  in  Corocoro  and  La 
Paz,  Bolivia.  The  purchasing  company  has  laid  a  cable 
from  Arica  to  Iquique,  where  the  new  section  of  cable  is 
connected  with  the  company's  existing  cables  and  thus 
gives  Arica  direct  communication  with  the  United  States. 

The  Western  Union  Telegraph  Company  has  obtained 
a  concession  from  the  Chilean  Government,  signed  Novem- 
ber 7,  1911,  to  lay  a  cable  between  Arica,  Chile,  and 
Panama.  The  company  intends  to  lay  from  Panama  a 
1684-mile  cable  to  connect  with  the  "Western  Union  cable 


CABLES— THE  NERVES  OF  FOREIGN  TRADE   159 

station  at  Miami,  Florida,  and  from  there  to  Barbados 
where  connection  will  be  made  with  the  cables  of  the  Wes- 
tern Telegraph  Company. 

Colombia. — The  Central  &  South  American  Telegraph 
Company  (All  America  Cables),  has  recently  laid  a  cable 
between  Colon,  Panama,  and  Cartagena,  Colombia.  The 
company  will  also  extend  its  lines  to  Barranquilla,  Colom- 
bia, in  the  near  future.  The  concession  permits  the  com- 
pany also  to  touch  other  points  on  the  north  coast  of  the 
Republic. 

Ecuador. — All  America  Cables  have  laid  an  additional 
cable — a  third  triplicate  line — from  St.  Elena,  Ecuador,  to 
Chorrillos,  Peru  (Callao,  Peru).    See  below  under  Peru. 

Peru. — The  Central  &  South  American  Telegraph  Com- 
pany (All  America  Cables),  have  laid  an  additional  cable 
between  Callao,  Peru,  and  St.  Elena,  Ecuador,  connect- 
ing at  the  latter  point  with  the  cables  now  running  to 
Salina  Cruz,  from  which  city  the  cables  run  to  Galveston. 

Uruguay. — A  Government  resolution  of  September  24, 
1918,  contained  an  important  provision  with  reference  to 
cable  concessions  in  Uruguay. 

Article  1.  This  article  refuses  to  grant  the  petition  of  the 
Western  Telegraph  Company  for  the  extension  for  30  years  of 
its  cable  concession,  which  expired  July  15,  1917. 

Article  2.  This  provides  for  the  presentation  to  the  Chamber 
of  a  bill  regulating  cable  concessions. 

Article  3.  This  article  authorizes  precariously  {con  caracter 
precario)  the  Central  and  South  American  Telegraph  Company 
to  extend  its  telegraph  and  telephone  lines  from  Buenos  Aires 
to  Montevideo. 

West  Indies. — All  America  Cables  have  laid  recently  a 
cable  from  Guantanamo  to  Porto  Rico,  with  further  exten- 
sions from  Guantanamo  to  Santiago,  Cuba.  An  executive 
decree  of  the  Brazilian  Government  under  date  of  May  18, 
1920,  grants  permission  to  the  Western  Telegraph  Com- 
pany to  land  at  Maranham,  Brazil,  the  cable  which  will 
be  laid  from  Barbados  to  the  city  of  Belem  (Para). 


160        FOREIGN  TRADE  MARKETS  AND  METHODS 


Cable  Rates. — A  general  idea  of  cable  rates  to  Latin 
American  countries  may  be  gained  from  the  following 
list  which  has  been  furnished  by  All  America  Cables,  Inc. : 


Full  Rate  from  New 
York  City  to— 


and 


Antigua 

Argentina   

Barbados 

Bolivia:   Corocoro 

La  Paz 

Bolivia:  Riberalta  (via 

wireless) 

Bolivia  :     (All     Other 

Places) . . . 
Brazil:  Rio  de  Janeiro 

and  Santos 
Brazil:   Amazon    River 

District  1st  Zone. . 
Brazil:  Amazon    River 

District  2nd  Zone 
Brazil :      (All       Other 

Places) 

British  Guiana 

Chile 

Colombia:    Buenaven- 
tura   and     Carta- 


gena   

Colombia:  (All   Other 
Places) 

Peru:  Itaya,Masisea,Or 
ellana,  Puerto  Ber 
mudez,  Putumayo, 
Requena  (via  Wire- 
less)   

Porto  Rico 

Salvador:  LaLibertad. 

Salvador:  (All  Other 
Places) 


Per 
Word 


$0.36 
.50 
.36 

.50 

.75 

.55 

.54 

.95 

1.25 

.65 
.36 
.50 

.50 
.65 


.70 
.40 
.44 

.49 


FuU  Rate  from  New 
York  City  to— 


Costa    Rica     (Sender's 

Risk) 

Cuba:  Santiago 

Cuba  (AH  Other  Places) 

Dominica 

Ecuador  

Grenada 

Guadeloupe 

Guatemala:  San  Jos6. . 
Guatemala  (All  Other 

Places) 

Haiti  (via  Fisherman's 

Point  and  Wireless) 
Honduras   (Sender's 

Risk) 

Jamaica 

Nicaragua:  San  Juan  del 

Sur 

Nicaragua  (All  Other 

Places) 

Panama 

Paraguay 

Peru :    Iquitos   (via 

Wireless) 

San  Domingo  via  Fisher 

man's    Point    and 

Wireless 

St.  Croix 

St.  Kitts 

St.  Lucia 

St.  Thomas 

St.  Vincent 

Trinidad 

Uruguay  


Per 
Word 


.49 
.15 
.20 
.36 
.50 
.36 
.85 
.44 

.49 

.40 

.49 
.36 

.44 

.49 
.30 
.50 

.60 


.37 
.50 
.36 
.36 
.50 
.36 
.36 
.50 


A  Deferred  Rate  service  is  in  operation  via  All  America 
Cables  to  Cuba,  Porto  Rico,  Guadeloupe,  and  all  places  in 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       161 

Central  and  South  America,  except  Costa  Rica,  Venezuela, 
French  and  Dutch  Guiana,  and  all  wireless  stations.  These 
messages  are  subordinated,  in  the  order  of  their  receipt,  to 
full  rate  traffic  for  a  period  not  exceeding  twenty-four  (24) 
hours.  The  rate  to  all  the  above  mentioned  places  except 
Cuba,  is  one-half  the  ordinary  rate;  to  Santiago,  Cuba, 
there  is  a  special  rate  from  New  York  City  of  4  cents  per 
word,  to  other  places  in  Cuba,  the  rate  from  New  York 
City  is  8  cents  per  word. 

Conditions. — The  use  of  more  than  one  language  in  the 
same  message  is  prohibited.  Messages  must  be  written  either 
in  the  language  of  the  country  of  origin ;  of  destination  or 
in  French.  Code  is  not  admissible.  Figures,  commercial 
marks,  groups  of  letters,  abbreviations,  etc.,  will  not  be 
accepted.  Numbers  (except  in  the  address)  must  be  writ- 
ten in  words.  Deferred  messages  must  carry  one  of  the 
following  prefixes: 

"LCO"  language  of  the  country  of  origin;  "LCD"  lan- 
guage of  the  country  of  destination;  "LCF"  written  in 
French.  Prefixes  are  to  be  written  immediately  before  the 
address  and  are  counted  and  charged  for  as  one  word. 

For  the  convenience  of  customers  who  require  aspecially 
rapid  cable  facilities  All  America  Cables  have  established 
an  Urgent  service  to  Argentina,  Bolivia,  Brazil,  Chile,  Car- 
tagena, Colombia,  Guayaquil,  Ecuador,  Peru,  Uruguay, 
Porto  Rico,  Guadeloupe,  Virgin  Islands  and  British  West 
Indies.  Urgent  messages  take  precedence  over  all  other 
classes  of  traffic.  The  rate  is  three  (3)  times  the  ordinary 
rate.  The  indication  'URGENT'  must  appear  as  the  first 
word  in  the  address  and  is  counted  as  one  additional 
word. 

All  America  Cables,  Inc.,  announced  in  1921  the  inaugura- 
tion of  a  Week-End  Cable  Letter  Service  from  its  New  York 
offices  at 

89  Broad  Street  (Main  Office)   .   Tel.  Broad  7470 
7  Cortlandt  Street  "     Cortlandt  4494 


162      FOREIGN  TRADE  MARICETS  AND  METHODS 

20  Spruce  Street Tel.  Beekman  2788 

136  Franklin  Street    "    Franklin  0274 

234  Fifth  Avenue   "    Mad.  Sq.  5056 

500  Fifth  Avenue "    Vanderbilt  9464 

(Messages  Only  Receivable  Over  Their  Own  Counters) 

To  THE  FOLLOVTING   STATIONS  OP  ALL  AMERICA   CABLES  Systsm 

in  Central  and  South  America: 

Sau  Jose  * Guatemala 

La   Libcrtad    ; Salvador 

San  Juan  Del   Sur    Nicaragua 

Colon       I  „ 

■n  > Panama 

Panama  j 

Balboa   Canal  Zone 

Buenaventi 


tura  "1 


.Peru 


^ Colombia 

Cartagena 

Esmeraldas 

Guayaquil      |. Ecuador 

St.  Elena 

Paita 

Callao 

Barranco 

Lima 

La  Paz    1  Ti  1-  • 

Corocoro| ^^^^^^^ 

Taena 

Ajica 

Iquique 

Antofagasta 

Valparaiso 

Santiago  de  Chile ^ 

Buenos  Aires  1      ' Argentina 

Rosario  de  Santa  Fe  j 

Montevideo    Uruguay 

Rio  de  Janeiro   Brazil 

Santos    Brazil 


y Chile 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       163 

Messages  must  bear  the  prefix  "WLT,"  and  the  prefix, 
address  and  signature  will  be  counted  and  charged 
for. 

They  must  be  written  in  plain  language  of  the  country 
of  origin  or  destination.  Code  is  not  admissible.  Num- 
bers, except  in  addresses,  must  be  written  in  words.  The 
use  of  more  than  one  language  in  one  message  is  not  per- 
mitted. Code  addresses  to  their  own  offices  may  be  used. 
To  points  beyond  these  offices  they  are  accepted  at 
sender's  risk.  They  must  bear  the  post  office  address  and 
will  be  mailed  from  the  nearest  terminal  office  of  this  com- 
pany. Messages  to  Colombia  may  only  be  sent  to  Carta- 
gena or  Buenaventura. 

Week-end  letters  may  be  filed  during  the  week  but  will 
not  be  forwarded  before  midnight  Saturday,  delivery  at 
points  where  All  America  Cables  have  offices  to  be  made 
the  following  Monday  morning. 

The  following  rates  prevail : 

From  their  New  York  City  Offices  to  the  above  men- 
tioned points  (except  Montevideo,  Uniguay,  Rio  de  Janeiro 
and  Santos,  Brazil)  the  rate  is  $4.50  for  25  words  or  less, 
15  cents  for  each  additional  word ;  to  Montevideo,  Uruguay, 
the  above  rate  plus  1  cent  per  word  Uruguayan  Govern- 
ment tax;  to  Rio  de  Janeiro  and  Santos,  Brazil,  $5.00  for 
25  words  or  less,  20  cents  for  each  additional  word ;  plus 
2  cents  per  word  to  cover  the  Uruguayan  and  Brazilian 
Government  taxes. 

The  Central  American  Governments  of  Guatemala, 
Nicaragua  and  Costa  Rica  charge  additional  rates  for 
handling  this  class  of  traffic  beyond  the  terminal  Offices 
of  All  America  Cables,  Inc.,  at  San  Jose,  Guatemala,  and 
San  Juan  del  Sur,  Nicaragua. 

Gautemala,    2i^c,  per  word  additionaL 

Nicaragua,     2c 

Costa  Rica,    2c        "        " 


164       FOREIGN  TRADE  MARKETS  AND  METHODS 

Rates  from  New  York  to  points  in  the  West  Indies  are 
approximately  as  follows : 

Cuba:  Per  word 

Havana    $0.15 

Other  places 20 

The  rates  "via  All  America"  are :  Santiago  and  F.  P. 
15e. ;  all  other  points .20 

Haiti : 

All    America    Cables — U.    S.    Naval    Communication 

Service   40 

U.  S.  and  Haiti  Telegraph  and  Cable  Co.  to  Cape 

Haitien,  Mole  St.  Nicholas,  and  Port  au  Prince 60 

All  other  places    65 

Dominican  Republic: 

All    America    Cables — U.    S.    Naval    Communication 

Service    37 

Western    Union — Cuba    Submarine    Telegraph    Co. — 

radio  of  Guanica  Centrale  from  Porto  Rico 70 

U.  S.  and  Haiti  Telegraph  and  Cable  Co 80 

French  West  Indies: 

U.  S.  and  Haiti  Telegraph  and  Cable  Co 1.38 

Porto  Rico: 

All  America  Cables   .40 

All   America   Cables — U.   S.    Naval    Communication 

Service  (Wireless  from  Cuba) .35 

Western   Union — Cuba   Submarine    Telegraph    Co. — 

West  India  and  Panama  Telegraph  Co. 40 

U.  S.  and  Haiti  Telegraph  and  Cable  Co 40 

Halifax  and  Bermuda  Cable  Co 40 

St.  Thomas  and  St.  Croix: 

All  America   Cables — U.    S.    Naval    Communication 

All  American  Cables  and  W.  I.  &  P.  Tel.  Co 50 

Western    Union — Cuba    Submarine    Telegraph   Co. — 

West  India  and  Panama  Telegraph  Co 50 

Halifax  and  Bermuda  Cable  Co 50 

Direct  West  India  Cable  Co 50 

West  India  and  Panama  Telegraph  Co 50 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       165 

Guadaloupe : 

All  America  Cables— W.  I.  &  P 85 

Western  Union — Cuba  Submarine  Telegraph  Co 85 

U.  S.  and  Haiti  Telegraph  and  Cable  Co 85 

Halifax  and  Bermuda  Cable  Co 85 

Direct  West  India  Cable  Co 85 

West  India  and  Panama  Telegi-aph  Co 85 

The  Art  of  Using  Cables. — The  foreign  merchant  and 
particularly  the  men  who  are  responsible  for  telegi-aphic 
and  cable  intercommunication  should  not  only  be  familiar 
with  cable  systems,  but  also  should  be  versed  in  the  prac- 
tical art  of  using  them  in  the  most  attractive  and  eco- 
nomical manner. 

In  our  export  houses  where  there  is  a  regular  coding 
and  cable  department  it  becomes  increasingly  important 
for  the  people  responsible  for  sending  cables  to  under- 
stand something  of  the  business,  A  cable  man  who  can 
also  combine  with  his  knowledge  of  cables  a  merchandis- 
ing r,nd  shipping  knowledge  becomes  of  special  value  to 
his  company.  At  least  there  is  the  necessity  of  a  close 
cooperation  between  the  merchandise  man  and  the  cable 
clerk  in  order  to  avoid  costly  errors  and  to  bring  about 
the  most  economical  communication. 

In  order  to  follow  a  cable  in  its  course  from  the  man 
who  writes  it  to  its  destination  we  are  giving  here- 
with some  practical  hints  from  an  experienced  cable 
operator : 

In  writing  a  message  which  is  to  be  sent  by  cable,  the  first 
thing  to  be  borne  in  mind  is,  of  course,  whether  the  subject  is 
really  worth  the  expense  of  a  cable  or  whether  a  letter  could 
not  be  written  just  as  well.  In  deciding  this,  the  importance 
and  urgency  of  the  matter  is  the  first  consideration,  then  the 
comparative  length  of  time  required  for  a  letter  or  cable  to 
reach  the  given  destination,  the  cable  rate  to  that  point,  the 
number  of  code  words  the  message  will  require,  etc.  In  the 
majority  of  eases  there  is  no  difficulty  in  deciding  whether  a 


166       FOREIGN  TRADE  MARKETS  AND  METHODS 

cable  is  advisable  or  not,  but  there  are  eases  in  whieb  cables  are 
sent  where  a  letter  would  do  as  well,  and  there  are  others  in 
which  no  cable  is  sent  where  one  might  be  worth  while.  All 
these  things  have  to  be  considered  and,  of  course,  no  one  but  the 
man  doing  the  business  can  make  the  decision. 

As  stated,  he  should  write  his  message  as  far  as  possible  in 
phrases  most  commonly  used  in  business,  and  which  are  most 
likely  to  be  found  in  the  code.  The  writing  of  cables  can  be 
made  an  art  in  itself  provided  one  knows  something  about  the 
codes,  and  provided  also,  which  is  most  essential,  that  each 
message  be  composed  not  alone  from  the  standpoint  of  the  man 
writing  it  and  who  knows  the  transaction  and  what  is  in  his 
own  mind,  but  taking  the  position  as  far  as  possible  of  the  man 
at  the  other  end  who  does  not  know  so  much  about  it.  After 
every  message  is  drafted  the  writer  should  endeavor  to  put  him- 
self in  the  place  of  the  man  at  the  other  end  and  read  the  message 
over  to  see  whether  it  will  convey  to  him  all  that  he  should 
know. 

There  are  other  little  points  which  can  be  taken  advantage  of 
if  they  are  known,  such  as  the  fact  that  it  is  in  most  cases  cheaper 
to  refer  to  only  one  word  than  to  two  or  more.  References 
should  be  written  out  clearly  on  the  cable  memorandum,  to 
enable  the  cable  department  to  check  the  correctness  of  them. 
Whenever  you  write  a  letter  to  which  you  want  a  rei^ly  by  cable, 
it  is  often  advantageous  to  secure  a  special  code  word  or  words 
from  the  cable  department  for  inclusion  in  your  letter,  by  means 
of  which  your  correspondent  can  cable  you  in  one  or  two  half 
words  that  might  otherwise  take  several  full  words. 

There  is  the  subject  of  domestic  telegrams,  including  messages 
to  Cuba,  to  which  due  attention  is  not  always  given:  telegrams 
are  frequently  verbose;  advantages  of  the  night  and  day  letter 
services  should  be  borne  in  mind,  and  the  correct  way  of  writing 
out  numbers  in  a  telegi'am.  As  far  as  possible  send  your  cables 
to  the  cable  department  early  in  the  day;  do  not  hold  them  all 
until  closing  time,  as  this  means  that  the  cable  department  will 
have  comparatively  little  to  do  during  the  day  and  be  swamped 
at  night. 

Notation  should  be  made  on  the  message  to  indicate  to  the 
cable  department  just  how  urgent  it  is,  and  whether  it  should 
be  sent  "Immediately,"  "Some  time  today,"  or  "In  next  message." 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       167 

If  the  message  is  immediate  it  should  be  so  marked  so  that  it 
will  be  given  preference  by  the  cable  department  and  not  held 
to  take  its  turn;  if  it  is  not  so  urgent  it  can  be  coded  when  its 
turn  comes.  Veiy  often  it  can  be  combined  with  another  mes- 
sage for  the  same  addressee,  which  saves  two  words,  as  the 
cable  company  charges  the  same  rate  for  each  word  in  the  cable 
address  as  for  words  in  the  body  of  the  message.  For  messages 
which  are  exceptionally  urgent,  there  exists  what  is  known  as  an 
"Urgent  Rate"  service  to  most  destinations,  for  which  the  rate 
is  three  times  the  ordinary  rate,  and  messages  sent  at  this 
rate  are  given  preference  by  the  cable  companies  over  all 
others.  Some  cable  companies,  however,  maintain  no  "urgent" 
rate. 

Another  detail  which  is  sometimes  overlooked  is  that  of  indicat- 
ing on  the  message  where  the  cost  of  it  sliould  be  charged. 
Every  cable  costs  money,  and  it  is  important  from  an  account- 
ing  standpoint  to  know  to  what  accounts  the  costs  of  the  various 
messages  sTiould  be  charged  so  that  the  cable  company's  bills 
can  be  properly  allocated  when  they  come  in.  This  should  never 
be  omitted. 

The  message  when  written  must  go  to  the  cable  department — 
which  is  a  detail  that  might  be  considered  not  worth  mentioning, 
but  it  is  well  to  remember  that  it  is  quite  possible  for  it  to  get 
lost  or  seriously  delayed  between  departments,  and  steps  should 
always  be  taken  to  assure  that  it  reaches  the  cable  department 
promptly.  The  best  method  is  to  write  cable  memoranda  in 
duplicate  and  have  the  cable  department  initial  and  return  the 
copy. 

Having  reached  the  cable  department  it  is  immediately  num- 
bered and  a  record  made  of  it;  it  is  coded  by  one  of  the  cable 
clerks,  his  coding  being  examined  by  the  one  in  charge  to 
determine  whether  it  has  been  economically  and  accurately  done; 
the  code  message  is  written  out  on  cable  blanks  and  the  type- 
written copies  of  the  message  as  coded  are  made,  with  the  words 
properly  numbered.  The  coded  cable  is  retranslated  by  a  cable 
checker  as  if  it  were  an  incoming  message  and  his  translation  is 
compared  with  the  original;  the  cable  is  then  given  to  the  tele- 
graph operator  for  transmission  over  the  pony  wire  to  the 
cable  office,  where  it  is  sent  along  on  its  journey. 

In  due  course  the  message  arrives  at  the  other  end,  is  trans- 


168        FOREIGN  TRADE  MARKETS  AND  METHODS 

lated  and  cheeked  by  the  cable  department  there  in  much  the 
same  manner  as  our  incoming  messages  here,  and  the  copies  dis- 
tributed to  those  who  should  get  them. 

Ownership  of  Cables. — It  is   of  interest  to  note   the 
ownership  of  the  world's  cable  systems: 

SuBMAKiNE  Cables  of  the  World  Privately  Owned 


Companies 


Number  Length, 
of       I  Nautical 
Cables       Miles 


African  Direct  Telegraph  Co.  (British) 

Amazon  Telegraph  Co 

Canadian  Pacific  R.  R.  Co 

Central   and   South   American   Telegraph   Co 

(AU  Amor.)  (U.  S.) 

Commercial  Cable  Co.  (U.  S.) 

Conmaercial  Cable  Co.  of  Cuba  (U.  S.) 

Commercial  Pacific  Cable  Co.  (U.  S.) 

Compagnie  AUemande  des  Cables  Transatlan- 

tiques 

Compagnie  des  Cables  Sud-Americains  (French) 
Compagnie  Frangaise  des  Cables  T61egraphiques 

(French) 

Compania  Telegrafico-Telef onica  de  la  Plata . . 

Cuba  Submarine  Telegraph  Co.  (British) 

Deutsch-Atlantische  Telegraphenges  (German) 

Taken  over  by  Great  Britain 

Deutsch-Niederlandische        Telegraphengesell- 

schaft  (German) 

Deutsch-Subamerikanische     Telegraphengesell- 

schaf t  (German) 

Direct  Spanish  Telegraph  Co 

Direct  West  India  Cable  Co.  (British) 

Eastern    and    South    African    Telegraph    Co 

(British) 

Eastern  Extension  Australasia  and  China  Tele- 
graph Co.  (British) 

Eastern  Telegraph  Co.  (British) 

Europe  and  Azores  Telegraph  Co.  (British) . . . 
Grande  Compagnie  des  Telegraphs  du  Nord. 
Great  Northern  Telegraph  Co.  (Danish) 


9 
20 
11 

25 

15 

1 

6 

5 

7 

25 

1 

11 

5 

3 

5 
4 
2 

16 

33 

140 

2 

29 

30 


3,056 

1,388 

103 

20,000 

17,274 

1,285 

10,010 

9,556 
3,779 

11,657 

28 

1,338 

9,661 

3,416 

7,386 

711 

1,263 

10,536 

26,475 

46,615 

1,060 

9,331 

8,411 


CABLES— THE  NERVES  OF  FOREIGN  TRADE       169 

SuBMARixE  Cables  of  the  World  Privately  Owned — Continued 


Companies 


Number 

of 
Cables 


Length, 

Nautical 

Miles 


Halifax  and  Bermudas  Cable  Co.  (British) . . . 

Indo-European  Telegraph  Co.  (British) 

Mexican  Telegraph  Co.  (All  America)  (U.  S.) 
Osteuropaische  Telegraphenges.  (German)..  . 
River  Plate  Telegraph  Co.  (Argentina) 

Soci6t6  Anonyme  Beige  des  Cables  T61e- 
graphiques 

United  States  and  Haiti  Telegraph  and  Cable 
Co 

West  African  Telegraph  Co.  (British) 

West  Coast  of  America  Telegraph  Co.  (British) . 

West  India  &  Panama  Telegraph  Co.  (British) . 

Western  Telegraph  Co.  (British) 

Western  Union  Telegraph  Co.  (U.  S.) 

Totals 


847 

21 

3,000 

185 

220 


61 


1 

8 

7 

22 

40 

1,391 
1,470 
1,973 
4,355 
23,874 

35 

23,210 

532 


262,015 


Cables  Owned  by  Nations 


Countries 


Nautical 
Miles 


Argentine  Republic 

Austria 

Bahamas 

Belgium 

Brazil 

British  Guiana 

British  India 

Bulgaria 

Canada 

Ceylon  and  India  (joint) 

China 

Denmark 

France  and  Algeria 

France 


376 

66 

1,003 

451 
3,300 
9,002 


170       FOREIGN  TRADE  MARKETS  AND  METHODS 
Cables  Owned  by  Nations — Continued 


Countries 


Number 

of 
Cables 


Nautical 
Miles 


(French)  Dahomey  and  dependencies 

Germany 

Great  Britain  and  Ireland 

Greece 

Holland 

Italy 

Japan 

Mexico 

Netherland  (Indies) 

New  South  Wales 

New  Zealand 

Norway 

Pacific  Cable  Board  (cables  in  Pacific  between 

British  America  and  Australia) 

Portugal 

Queensland 

Roumania 

Russia  in  Europe  and  the  Caucasus 

Russia  in  Asia 

South  Australia 

Spain 

Sweden 

Switzerland 

Tasmania 

Tunis 

Turkey  in  Europe  and  Asia 

United  States  (Alaska) 

Uruguay 

Victoria 

Western  Australia 

Totals 


97 

222 

13 

52 

63 

144 

6 

27 

140 

36 

1,166 

6 
4 

22 
1 

30 
1 
3 

25 

57 
2 
7 

24* 

14 

5 

4 

3 


1 

2,954 

3,037 

59 

279 
2,149 
4,264 

357 

5,130 

34 

370 
1,727 

9,288 

139 

53 

177 

930 

21 

54 

3,158 

197 

10 

9 

4 

365 

2,601 

8 

375 

13 


2,628 


55,496 


CHAPTER  X 
FINANCING    FOREIGN    TRADE 

According  to  conservative  figTires  there  have  been  in- 
vested in  the  United  States  since  1914  in  new  productive 
enterprises  and  machinery  more  than  $6,000,000,000.  Add 
this  to  the  business  and  trade  operations  in  existence 
before  the  war  and  one  can  readily  see  the  necessity  of 
developing  overseas  commerce  to  absorb  the  surplus  in 
production  in  this  country. 

American  foreign  trade,  which  doubled  between  1903 
and  1913,  has  made  of  late  such  strides  that  manufacturers 
and  business  men  generally  are  seeking  as  never  before  to 
know  the  means  by  which  such  trade  may  be  opened  and 
prosecuted.  The  modus  operandi  of  the  financial  and  com- 
mercial operations  are  among  the  important  things  which 
the  manufacturer  desiring  to  engage  in  foreign  trade  must 
thoroughly  understand.  It  is  not  enough  to  leave  this  mat- 
ter to  the  export  agent  or  the  bank,  if  the  merchant  or  the 
maker  of  goods  for  export  is  ultimately  to  succeed  in  over- 
seas trade.  He  must  needs  give  personal  attention  to  the 
understanding  of  the  methods  of  financing  his  shipments. 

The  comparatively  recent  establishment  of  a  chain  of 
American  banks  in  foreign  countries  has  made  possible  a 
new  and  indispensable  advantage  to  our  foreign  commerce. 
There  has  been  no  weaker  spot  in  our  international  trade 
armor  than  the  lack  of  our  own  banks  abroad,  through 
which  our  trade  operations  may  be  carried  on,  thus  safe- 
guarding the  knowledge  concerning  our  foreign  activities 
and  enabling  our  home  traders  to  facilitate  readily  com- 
mercial operations  overseas. 

171 


172       FOREIGN  TRADE  MARKETS  AND  METHODS 

Among  the  services  rendered  by  such  banks  there  has 
been  outlined  certain  privileges  given  by  one  of  our  bank- 
ing establishments,  the  National  City  Bank  of  New  York, 
which  has  established  in  the  past  five  years,  85  branches 
throughout  the  world. 

The  following  facilities  offered  by  this  bank  give  a  general 
idea  of  the  agencies  concerning  which  the  foreign  exporter 
should  be  more  or  less  familiar : 

Services  Rendered  by  Branch  Banks 

The  facilities"  which  our  foreign  branch  banks  enable  us  to  offer 
our  clients  may  be  epitomized  as  follows : 

1.  The  collection  of  drafts  drawn  upon  foreign  houses. 

2.  The  protection  of  the  interests  of  American  merchants 
through  the  control  of  "To  Order"  shipments  until  pay- 
ment or  acceptance  by  foreign  purchaser  of  the  correspond- 
ing draft. 

3.  The  protest  of  di-afts  where  drawer  so  instructs. 

4.  The  securing  of  legal  services  in  foreign  countries  through 
our  own  foreign  attoi'neys. 

5.  The  creation  of  foreign  markets  for  dollar  exchange. 

6.  The  collection  of  credit  data  on  foreign  houses,  and  the 
continued  study  of  foreign  market  and  credit  conditions, 
reports  on  which  are  constantly  forwarded  to  New  York 
for  the  information  of  our  American  clients. 

7.  The  forwarding,  to  our  branch  banks,  of  credit  informa- 
tion upon  firms  represented  by  American  travelers,  thus 
enabling  these  representatives  to  refer  foreign  merchants 
to  our  branches  for  credit  information  concerning  their 
principals. 

8.  The  collection  of  trade  data  covering  the  possibilities  in 
foreign  countries  of  American  manufactures  and  products 
of  every  description. 

9.  The  study  of  foreign  market  conditions  covering  commodi- 
ties produced  in  the  foreign  country  for  export. 

10.  Upon  request,  letters  of  introduction  and  letters  of  credit 
are  issued  from  our  New  York  office  to  our  foreign  branch 
correspondent  banks  placing  at  the  disposal  of  our  Ameri- 
can clients  or  their  representatives  who  may  be  traveling 
the  varied  facilities  of  our  foreign  offices  and  connections. 


FINANCING  FOREIGN  TRADE  173 

11.  Branch  banks  through  coming  directly  into  contact  with 
the  ti'ade  and  financial  problems  arising  in  both  the  export 
and  import  field  assist  materially  in  their  solution  through 
the  publicity  of  the  results  of  special  study  of  such  matters. 

12.  The  assistance  rendered  in  the  development  of  American 
foreign  commerce,  both  import  and  export,  through  the 
direct  banking  facilities  afforded  at  home  and  abroad  and 
in  general  through  the  bringing  about  of  a  far  better  com- 
mercial understanding  between  this  country  and  the  coun- 
tries in  which  our  branch  banks  are  functioning. 

Financing  Foreign  Shipments. — There  seems  to  have 
been  a  feeling  in  the  minds  of  many  would-be  American 
foreign  traders  who  have  had  little  touch  with  foreign 
business,  that  it  is  rarely  safe  for  them  to  allow  merchan- 
dise to  leave  the  country  unless  it  is  paid  for  in  advance 
or  before  shipment.  This  condition  of  mind  is  due,  of 
course,  to  ignorance  as  to  the  business  integrity  of  foreign 
buyers. 

Already  the  agencies  for  securing  reliable  credit  infor- 
mation are  sufficiently  extensive  to  make  financial  opera- 
tions in  connection  with  export  and  import  trade  almost 
as  secure  as  they  are  in  our  own  country.  The  financing 
of  export  shipments,  however,  should  not  be  confused 
with  credit.  The  two  subjects  are  naturally  closely  related 
but  although  certain  American  banks  have  extensive  lists 
of  credit  information  concerning  foreign  firms,  neverthe- 
less, they  are  not  supposed  to  guarantee  paynnent  of 
invoices  for  goods  shipped  to  a  foreign  country.  The 
bank's  business  is  to  furnish  funds  to  carry  the  merchan- 
dise from  seller  to  buyer  by  discounting  the  draft.  Credit 
information  is  given  by  banks  when  possible,  but  the  final 
responsibility  of  trusting  the  customer  rests  with  the 
seller  or  the  exporter.  The  bank  simply  follows  the 
instruction  of  its  client,  the  preparation  of  documents 
including  bills  of  lading,  insurance  certificate,  invoices, 
consular  invoice,  certificate  of  origin,  weight  note  or  pack- 
ing account,  etc.,  are  all  routine  matters  and  involve  the 
work  of  the  shipper.    The  bank,  however,  must  see  to  it 


174      FOKEIGN  TRADE  MARIO^TS  AND  METHODS 

that  it  has  a  clear  title  and  that  goods   are  properly 
insured. 

The  first  essential  in  the  financing  of  foreign  shipments 
is  for  the  seller  to  have  a  very  definite  understanding 
with  the  buyer  about  the  method  of  payment.  This  is 
extremely  important  and  it  is  because  of  the  lack  of  such 
understandings  that  many  of  the  mistakes  and  misunder- 
standings in  connection  with  overseas  trade  occur.  No 
doubt  should  be  allowed  to  exist  in  the  minds  of  either 
party  as  to  whether  the  method  of  payment  is  to  be  in 
cash,  time,  or  open  accoimt.  The  wishes  of  the  buyer 
should  be  clearly  known  as  to  what  the  price  shall  include, 
that  is,  F.O.B.  cars  (at  factory),  F.A.S.  steamer,  or  F.O.B. 
steamer  (at  port  of  shipment),  C.  &  F.  (cost  and  freight 
to  port  of  destination),  and  O.I.F.  (cost,  insurance  and 
freight  to  port  or  place  of  destination).  There  is  a  very 
prevalent  idea  that  prices  on  a  C.  &  F.  or  C.I.F.  basis 
presume  an  extension  of  credit,  but  that  is  not  so,  and 
payment  may  be  required  in  advance  of  shipment,  quite 
as  well  when  selling  C.I.F.  as  on  sales  made  F.O.B.  fac- 
tory, or,  on  the  other  hand,  drafts  at  long  time  may  be  used 
to  settle  F.O.B.  sales.  It  docs  not  follow  that  because 
all  of  the  above  methods  or  terms  may  be  used  that  they 
necessarily  will  be,  but  it  is  highly  important  that  the 
representative  of  the  seller  should  be  thoroughly  familiar 
with  their  meaning  and  able  to  apply  them  in  a  practical 
way,  so  as  to  translate  one  into  another.  This  latter  is 
particularly  necessary,  for  without  it  it  is  impossible  to 
make  a  comparison  of  the  prices  offered  by  competitors 
unless  they  happen  to  be  identical  in  terms.  It  must  be 
kept  in  mind  by  the  candidates  for  salesmanship  honors 
abroad  that  it  not  infrequently  happens  that  a  merchant 
in  some  small  city  wdll  be  better  informed  both  about  his 
own  business  as  well  as  general  business,  than  the  man 
sent  from  this  country  to  solicit  his  trade  and  first  impres- 
sions should  not  be  too  strongly  relied  upon.  The  sales- 
man who  can  whistle  only  one  tune  very  quickly  exhausts 
his  repertoire  and  stands  a  poor  chance  either  of  making 


FINANCING  FOREIGN  TRADE  175 

a  sale  or  learning  what  his  competitors  are  offering  mak- 
ing them  more  successful  than  himself,  and  no  time  need 
be  considered  wasted  that  is  spent  in  making  price  calcu- 
lations that  enable  a  salesman  to  approach  his  customer 
from  the  easiest  angle. 

Credit  vs.  Cash  Policy. — The  European  example  of 
giving  extensive  credits,  sometimes  in  Latin  America  as 
long  as  nine  months  or  a  year,  gathering  along  the 
way  interest  charges  and  ako  certain  commissions,  has 
not  been  followed  to  a  very  large  extent  by  American 
manufacturers  or  exporters.  Nevertheless  the  extension  of 
credit  to  customers  overseas  is  absolutely  essential  in  cer- 
tain cases  in  order  to  meet  the  seasonal  requirements  of 
agricultural  enterprises,  as  well  as  to  accommodate  the 
buyers  whose  business  is  often  affected  by  the  fluctuation 
of  exchange.  Moreover  in  some  cases  the  foreign  merchant 
requires  time  for  a  partial  turnover  of  his  goods  if  he  is 
going  to  remain  in  business ;  therefore  many  foreign  buyers 
look  at  the  credit  arrangements  to  be  obtained  from  our 
exporters  and  manufacturers  almost  as  closely  as  they  do 
the  price  and  the  quality  of  the  goods,  and  an  advantageous 
credit  arrangement  often  determines  the  decision  of  the 
foreign  buyer. 

In  a  report  from  the  American  Consular  Office  at  Malaga, 
Spain,  it  was  shown  that  of  630  letters  received  by  this 
office  from  American  exporters  seeking  a  field  of  trade  in 
this  district,  only  one  contained  a  request  for  information 
as  to  credit  usages;  the  other  letters  all  asked  for  full 
details  as  to  opening  negotiations  for  new  goods,  competi- 
tion to  be  met,  market  demands,  results  to  be  expected 
from  advertisements  or  local  agencies,  customs  regulations 
and  tariffs,  but  leaving  entirely  out  of  their  calculation  the 
subject  of  credits,  seeming  to  take  it  for  granted  that  the 
local  trade  would  adapt  itself  to  American  usage  in  this 
matter.  In  fact  out  of  222  catalogues  received  from 
American  manufacturers  by  this  Consular  office  in  Spain 
a  demand  for  cash  payments  was  shown  by  85  per  cent 
while  the  best  terms  offered  by  the  remaining  15  per  cent 


176       FOREIGN  TRADE  MARKETS  AND  METHODS 

were  delivery  of  the  shipping  documents  against  an  ac- 
ceptance of  drafts  at  30  to  90  days'  sight. 

The  suspicion  which  Americans  have  had  of  credit  busi- 
ness abroad  has  been  due  quite  largely  to  the  lack  of  financ- 
ing agencies  such  as  bank  acceptances  and  the  open  dis- 
/jount  market  which  have  prevailed  in  Europe.  There  has 
been  also  until  very  recent  years  considerable  difficulty  in 
securing  credit  information.  Latin  American  business 
houses  do  not  so  easily  or  willingly  give  upon  request  an 
account  of  their  assets  and  liabilities  as  do  houses  in  the 
United  States.  Of  course  the  best  way  to  get  credit  infor- 
mation is  by  personal  contact,  sending  a  responsible  agent 
or  taking  the  trip  oneself  for  the  sake  of  acquaintanceship. 
Any  South  American  business  man  who  comes  to  know  you 
will  be  quite  willing  to  give  you  credit  information  required 
relative  to  his  business.  Furthermore,  the  leading  banks 
of  the  country,  as  well  as  chambers  of  commerce,  such 
bodies  as  the  American  Chamber  of  Commerce  in  Buenos 
Aires,  Rio  de  Janeiro,  Shanghai  and  other  foreign  cities 
will  furnish  credit  information  upon  application. 

Just  here  it  may  be  well  to  add  that  very  long  credits 
are  considered  increasingly  to  be  bad  economics.  During 
a  visit  to  Chile  some  years  ago  one  of  the  most  influential 
Chilean  business  men  told  me  he  believed  too  long  credits 
to  be  a  misfortune  to  his  people,  or  to  any  nation,  since  the 
goods  in  the  end  cost  much  more,  and  furthermore  the 
temptation  is  thrown  in  the  customers'  path  to  utilize  the 
cash  which  he  should  be  saving  to  pay  for  his  goods  in 
speculation  or  for  immediate  needs.  It  is  doubtful  whether 
such  long  credits  as  were  known  before  the  war  will  again 
be  general.  The  important  essentials  for  successful  trade 
will  always  be  quality,  good  service,  low  prices  and 
methods  of  financing  satisfactory  to  both  parties  involved. 

The  following  remarks  relative  to  the  subject  of  credit 
by  Mr.  C.  E.  Hammond  of  the  Foreign  Credit  Department 
of  a  large  foreign  merchandising  firm  are  suggestive  and 
useful : 


FINANCING  FOREIGN  TRADE  177 

In  order  for  a  merchant  to  be  in  a  position  to  offer  the  best 
possible  terms,  he  must  know  his  prospective  client  as  well,  if 
not  better,  than  his  competitors.  In  determining  a  firm's  claim 
on  credit  facilities  the  three  big  'C's'  play  a  large  part — 
Character^  Capability^  and  Capital.  Character  needs  no 
explanation,  for  business  character  is  just  as  important  as 
personal  moral  character.  Capability  indicates  in  what  manner 
a  customer  will  be  able  to  dispose  of  your  merchandise  at  a 
profit  and  the  skill  exhibited  in  disposing  of  same  in  the  shortest 
possible  time,  so  that  he  will  be  able  to  meet  your  draft  out  of 
the  proceeds  of  his  sales.  Capital  regulates  the  quantities  which 
the  customer  can  purchase.  In  analyzing  a  firm's  balance  sheet 
should  you  notice,  in  comparing  it  with  previous  balances  a  con- 
sistent increase  in  capital,  you  may  be  sure  that  the  capability 
displayed  by  that  firm  entitles  it  to  consideration  for  a  liberal 
line  of  credit. 

In  soliciting  business,  the  best  practice  calls  for  investigation 
of  client  before  taking  his  order — the  reason  lies  in  the  economy 
of  effort  and  betterment  of  service.  Wasted  efforts  on  the  part 
of  your  salesmen  result  if  the  order  is  not  shipped  after  being 
solicited,  on  account  of  credit.  It  is  far  better  to  confine  sales 
to  desirable  prospective  customers,  than  to  solicit  indiscriminately, 

A  salesman  will  find  it  to  his  advantage  to  investigate  a  pros- 
pective customer  prior  to  soliciting  the  business  so  that  his  report 
■will  be  in  the  hands  of  the  Credit  Department  before  his  order  is 
submitted  for  approval,  thereby  eliminating  delay  in  exe- 
cution, which  would  otherwise  result  if  the  same  had  to 
be  made  the  subject  of  credit  investigation.  If  this  plan 
is  not  followed  it  becomes  necessary  for  the  Credit  Depart- 
ment to  make  investigation  through  local  quarters.  There  are 
various  sources  for  this  information.  A  large  number  of  New 
York  banks  have  either  branches  or  correspondents  in  foreign 
countries  and  consequently  their  credit  information  files  are  quite 
complete.  This  information  usually  gives  a  firm's  declared 
capital,  net  worth,  manner  in  which  they  are  in  the  habit  of 
meeting  their  obligations,  whether  or  not  they  make  claims,  etc. 
Should  the  customer  be  a  client  of  the  bank's  branch  they  will 
be  able  to  tell  if  accommodations  are  solicited  and  how  such 
accommodations  are  taken  care  of. 

The  declared  capital  in  some  countries  cannot  be  used  as  a 
basis  for  credit  extension,  as  firms  are  taxed  by  their  Govern- 
ments on  declared  capital,  consequently  in  most  cases  the  declared 


178       FOREIGN  TRADE  MARKETS  AND  METHODS 

capital  is  a  good  deal  less  than  the  amount  with  which  they  are 
operating. 

Then  there  are  the  trade  investigations.  This  will  give  you 
the  experience  of  other  merchants,  providing  of  course,  they  will 
be  frank  in  expressing  themselves.  Reciprocity  among  exporters 
and  bankers  is  becoming  more  general  in  the  line  of  exchanging 
business  experiences  on  foreign  customers.  The  free  exchange 
of  opinions  between  merchants  is  of  vital  importance.  This  fact 
has  been  very  vividly  brought  out  in  a  recent  experience 
by  U.  S.  merchants  in  dealing  with  Cuban  clients.  Just 
prior  to  the  drop  in  the  dry-goods  market  they  were  selling  freely 
to  Cuban  buyers  with  the  understanding  that  these  customers 
were  confining  their  purchases  to  two  or  three  suppliers.  When 
the  drop  came  it  was  discovered  that  these  same  buyers  wero 
indebted  in  some  cases  to  over  thirty  U.  S.  firms  who  had  all 
been  extending  liberal  credit  under  the  impression  that  they  were 
supplying  the  customers  exclusively.  This  condition  could  havo 
been  avoided  if  a  free  exchange  of  opinions  had  been  solicited 
before  accepting  any  business.  The  National  Association  of 
Credit  Men  is  endeavoring  to  eliminate  a  repetition  of  just  such 
an  occasion  by  making  inquiry  of  exporting  concerns  on  any 
particular  firm  inquired  about  by  one  of  their  subscribers. 
To  all  firms  replying  they  send  a  complete  summary  of  the 
opinions  submitted. 

There  are  also  the  Commercial  Agencies  such  as  Dun  and 
Bradstreet.  These  reports  are  only  available  to  subscribers  of 
their  sei-vice.  The  minimum  number  of  reports  which  can  be 
obtained  is  twenty-five,  covering  a  period  for  one  year,  for  which 
they  charge  $60.00  with  an  additional  charge  of  $2.50  each  for 
any  report  in  excess  of  the  above  number,  excepting  of  course 
if  the  subscription  is  for  a  larger  number,  which  is  charged  for 
on  a  graduated  scale. 

Commodity  plays  an  important  part  in  granting  credit.  If 
the  merchandise  in  which  you  are  dealing  is  in  any  way  specula- 
tive, or  if  there  is  likely  to  be  a  drop  in  price,  it  is  advisable 
to  look  very  carefully  into  the  reputation  of  your  client.  If 
he  should  be  an  unscrupulous  man  he  would  have  no  hesitancy 
in  refusing  shipment  on  anival  or  canceling  order  after  you 
had  already  compromised  yourself  to  buy.  In  that  ease  there  is 
very  little  redress  for  the  exporter,  for  lawsuits  are  very  long- 
di'awn-out  affaii's  in  foreign  countries  and  the  chances  are  very 
slight  that  you  will  be  able  to  recover  damages. 


FINANCING  FOREIGN  TRADE  179 

There  is  another  commodity  hazard.  Some  merchandise  is 
so  perishable  that,  if  shipped  at  a  certain  season  of  the  year, 
it  will  deteriorate  and  be  absolutely  woi'thless  when  it  reaches 
its  destination.  I  am  speaking  now  covering  shipments  to  South 
America.  The  long  voyage  and  climatic  conditions  through  which 
it  passes'  on  its  trip,  play  sad  havoc  with  some  commodities. 
These  many  phases  must  be  veiy  carefully  studied  by  the  Credit 
Department. 

Relative  to  the  steps  taken  when  an  order  comes  from  a 
country  like  South  America,  the  following  can  be  stated 
as  a  method  of  quite  general  procedure: 

Usually  we  receive  some  kind  of  inquiry  from  our  own 
agency  or  branch  house  prior  to  receiving  the  order.  We  then 
investigate  the  name  through  local  banks  to  endeavor  to  ascertain 
their  oi^inion  of  this  particular  client,  as  well  as  searching  our 
own  files  for  previous  information.  On  cable  orders,  however, 
we  must  depend  to  a  great  extent  on  our  agency's  knowledge  of 
the  client,  as  we  'cannot  hold  up  these  orders.  It  is  the  custom 
to  confirm  cable  orders  the  same  day  they  are  received,  and  if 
we  are  unable  to  identify  the  client  locally  we  confirm  the  order 
subject  to  a  satisfactory  credit  report. 

Generally  speaking,  while  American  firms  are  opposed 
to  long  credits,  the  conviction  is  growing  that  good  service 
rendered  to  clients  will  tend  to  overcome  the  objection  of 
the  client  demanding  long  terms  of  credit. 

There  are  usually  three  ways  of  payment  for  goods  sent 
overseas : 

1. — There  is  the  open  credit  plan  which  is  used  quite 
generally  by  commission  houses  and  by  established  foreign 
trade  firms  having  their  own  branches  in  different  parts 
of  the  world  and  thereby  the  ability  to  get  first  hand  infor- 
mation concerning  the  financial  and  trustworthy  standing 
of  possible  clients.  This  credit  is  granted  to  a  customer 
on  the  books  of  the  seller  and  gives  him  the  privilege  of 
ordering  up  to  a  certain  amount  with  credit  from  one  to 
four  months,  or  whatever  the  case  may  be. 

2. — Payment  by  draft  against  the  importer,  at  sight  or 
30-60  days  or  more,  is  another  method  of  payment. 


180       FOREIGN  TRADE  MARKETS  AND  METHODS 

3. — Then  there  is  cash  payment  either  at  point  of  ship- 
ment or  at  destination,  the  customer  placing  funds  in  a 
bank  at  one  point  or  the  other  to  meet  such  cash  payments 
when  the  goods  are  ready  for  shipment. 

4. — There  is  also  the  Acceptance  Credit,  the  drafts  under 
which,  when  drawn  by  the  beneficiary  up  to  six  months' 
sight,  exclusive  of  days  of  grace,  are  "accepted"  by  a  bank, 
for  payment  at  maturity.  Such  drafts,  when  accepted  by 
a  member  bank  of  the  Federal  Reserve  system  are  eligible 
for  discount  in  the  open  market  or  for  rediscount  with  a 
Federal  Reserve  Bank  at  best  rates,  in  accordance  with  the 
Federal  Reserve  Board's  rulings  on  such  acceptances.  To 
establish  credits  of  this  nature  it  is  necessary  that  the 
purchaser  in  a  foreign  country  deposit  with  his  local  bank 
tlie  equivalent  of  the  required  amount  as  collateral,  or 
arrange  with  the  bank  accommodation  to  provide  for  the 
amount  involved. 

The  operation  of  these  Commercial  Credits,  when  made 
available  in  this  country,  is  as  follows: 

The  branch  bank  or  correspondent  in  the  foreign  country 
through  which  the  credit  has  been  created,  informs  the 
home  bank  of  the  opening  of  credit,  and  it  in  turn  informs 
the  beneficiary  that  the  credit  has  been  established  in  his 
favor,  and  also  the  amount  and  the  conditions  under  which 
the  bank  shall  make  payments  or  accept  drafts  drawn 
thereunder. 

Many  large  purchases  are  effected  through  this  medium, 
the  credits  being  arranged  not  only  by  South  American 
firms  in  favor  of  firms  in  the  United  States,  but  also  by 
American  firms  in  favor  of  South  American  and  European 
houses. 

Where  the  foreign  merchant  does  not  open  a  Commercial 
Credit  to  cover  his  merchandise  purchases  in  this  country, 
payment  is  usually  effected  through  the  medium  of  a  draft 
which  is  forwarded  for  collection,  either  with  or  without 
the  shipping  and  other  documents,  to  a  foreign  branch  or 
correspondent  bank. 

Although  there  are  many  terras  more  or  less  technical 


FINANCING  FOREIGN  TRADE  181 

with  "which  the  foreign  merchant  soon  becomes  familiar, 
the  foregoing  methods  of  financing  are  more  or  less  basic 
in  principle.  In  order  to  illustrate  a  complete  transaction 
from  the  opening  of  the  credit  to  the  final  payment,  we 
present  an  illustration  offered  by  the  National  City  Bank 
of  New  York  which  will  give  a  somewhat  practical  idea  step 
by  step  of  foreign  trade  financing : 

A  merchant  in  the  Argentine,  let  us  say,  has  ordered  a  quantity 
of  machinery  from  a  Chicago  house.  As  the  Chicago  house  is 
not  familiar  with  the  credit  standing  of  the  Buenos  Aires  firm, 
let  us  suppose  that  the  information  in  our  credit  files  is  not,  in 
this  instance,  of  a  nature  to  warrant  the  extension  of  time.  The 
Chicago  house  thereupon  cables  the  Argentine  merchant  that  the 
order  will  be  entered  if  a  confirmed  commercial  credit  is  opened 
in  their  favor  through  The  National  City  Bank  of  New  York. 

A  confirmed  credit  is  requix-ed  in  this  instance,  as  the  machinery 
may  be  of  special  manufacture,  and  the  Chicago  house,  before 
commencing  work  upon  it,  wishes  to  be  secured  against  a  joossiblo 
revocation  of  the  order  when  perhaps  the  machinery  is  half 
completed. 

The  Buenos  Aires  merchant,  acquiescing  in  the  demand  of  the 
Chicago  house,  arranges  with  the  Buenos  Aires  branch  of  The 
National  City  Bank  of  New  York  for  the  opening  of,  say  a 
$20,000  confirmed  credit,  to  be  availed  of  through  the  main  office 
of  the  bank  in  New  York. 

The  Chicago  house  is  made  the  beneficiary  under  this  credit, 
which  is  practically  an  order  on  the  New  York  office  of  the  bank, 
either  by  cable  or  letter,  to  pay  to  the  Chicago  house  that  amount 
stipulated,  generally  upon  deliveiy  to  the  bank  of  a  full  set  of 
shipping  documents  covering  the  shipment.  If  the  credit  were 
an  'acceptance  credit,'  the  New  York  office  of  the  bank  would 
'accept'  the  draft  of  the  Chicago  house  for,  say  thirty  or  sixty 
or  ninety  days,  as  may  have  been  agreed  upon. 

Upon  receipt  at  New  York  of  either  the  cable  or  letter  opening 
the  credit,  the  bank  at  New  York  immediately  notifies  the  benefi- 
ciary (the  Chicago  house  in  this  instance),  that  such  credit  has 
been  opened  and  the  conditions  upon  which  payments  thereunder 
will  be  made.  It  will  be  noted  upon  refei^ence  to  the  definition 
of  a  'confirmed  credit'  that  this  kind  of  credit  can  be  revoked 
only  with  the  consent  of  the  four  parties  concerned,  viz. :  the 


182      FOREIGN  TRADE  MARKETS  AND  METHODS 

Buenos  Aires  merchant,  the  Buenos  Aires'  branch  of  the  National 
City  Bank  of  New  York,  the  New  York  office  of  The  National 
City  Bank  of  New  York,  and  the  beneficiary  at  Chicago. 

The  machinery  having  been  completed,  the  Chicago  house  con- 
signs it  on  railroad  bill  of  lading  to  its  New  York  agent,  or,  in 
the  absence  of  a  New  York  agent,  then  to  some  reputable  for- 
warding house  at  New  York,  the  shipping  port,  with  instruc- 
tions to  secure  the  ocean  bills  of  lading,  the  Consular  invoice, 
insurance  certificates,  and  other  necessary  documents.  These 
documents  are  thereupon  presented  to  the  bank,  and  if  they  are 
in  order  and  meet  the  requirements  of  the  credit,  payment  will 
be  made  by  the  bank,  usually  through  the  medium  of  a  bank 
check  to  the  order  of  the  beneficiary.  If,  however,  the  beneficiary 
is"  a  depositor  of  the  bank,  it  is  probable  that  the  amount  will 
simply  be  credited  to  his  account. 

The  bills  of  lading  are  generally  made  out  'To  order'  and  are 
endoi-sed  in  blank  by  the  shipper,  after  which  they  are  for- 
warded to  our  Buenos  Aires  branch.  'To  Order'  bills  of  lading, 
however,  are  not  permissible  to  Venezuela  and  Colombia,  to  which 
countries  it  is  necessary  to  consign  documents  and  merchandise 
direct  to  consignee.  More  care  is  therefore  necessary  in  looking 
into  the  credit  standing  of  consignees  in  those  countries. 

It  will  be  noted  in  the  transaction  we  are  followiBg  that  as  the 
bills  of  lading  have  been  made  out  'To  Order'  and  endorsed  in 
blank,  the  bank,  having  possession  of  the  documents,  practically 
controls  the  shipment,  and  the  Buenos  Aires  branch  will  surrender 
these  evidences  of  title,  which  we  shall  assume  have  gone  along 
on  the  same  steamer  carrying  the  shij^ment,  only  upon  compliance 
by  the  purchaser  in  the  Argentine  with  whatever  conditions  were 
agreed  upon  in  the  undeiiaking  creating  the  credit. 

These  conditions  may  take  various  forms.  If  the  credit  stand- 
ing of  the  Argentine  merchant  is  beyond  question,  it  is'  possible 
that  he  has  established  with  our  branch  a  line  of  credit  to  cover 
his  commercial  credit  operations,  in  which  event  the  documents 
may  be  sun'endered  to  him  without  collateral  security  being 
placed  with  our  branch  bank. 

Should  security  be  deemed  advisable,  this  may  take  various 
forms',  such  as  depositing  with  the  branch  acceptable  securities 
(bonds  or  stocks)  until  liquidation  of  the  obligation,  or  perhaps 
the  depositing  of  a  note  bearing  the  endorsement  of  a  responsible 
individual  or  firm.  It  may  have  been  agreed  that  such  surrender 
is  to  be  made  upon  acceptance  by  the  Argentine  merchant  of  a 


FINANCING  FOREIGN  TRADE  183 

draft  to  be  drawn  upon  him  for  an  agreed  tenor  by  our  Buenos 
Aires  branch.  It  may  also  take  the  form  of  a  trust  receipt  to 
be  delivered  to  the  branch  by  the  Argentine  merchant,  under 
■which,  title  to  the  merchandise  remains  in  the  name  of  the  bank, 
the  proceeds  or  part  thereof,  of  partial  sales  to  be  turned  over 
by  the  merchant  to  the  branch  until  complete  liquidation  of  the 
transaction.  There  is  usually  more  form  than  substance  to  a 
trust  receipt,  however,  as  once  the  merchandise  has  been  placed 
in  the  warehouse  of  the  purchaser  it  is  not  an  easy  matter,  in  fact 
it  is  practically  impossible  in  most  instances,  to  have  it  so  marked 
as  to  keep  it  safely  segregated  from  other  merchandise  for  iden- 
tification in  the  event  of  default  or  other  impediment  arising. 

It  is  jDOssible  that  the  conditions  of  the  credit,  owing  to  the 
fi^nancial  and  credit  standing  of  the  Argentine  merchant,  may  be 
broad  enough  to  permit  the  documents'  being  forwarded  direct 
to  the  Argentine  merchant  by  the  shipper  in  the  States,  in  which 
case  such  documents  should  be  made  out  to  his  order  direct. 

In  the  ease  of  an  'acceptance  credit,'  the  draft  drawn  upon 
the  bank  by  the  beneficiary  (in  this  instance  the  merchant  in 
Chicago)  will  be  accejoted  by  the  main  office  of  the  bank  of  New 
York,  under  the  Federal  Reserve  Act  which  grants  to  national 
banks  the  privilege  of  accepting  bills  of  exchange  growing  out 
of  transactions  involving  the  importation  and  exportation  of 
goods.  This  acceptance  usually  takes  the  form  of  a  stamj)  across 
the  face  of  the  draft,  with  the  word  'accepted'  and  the  date,  with 
the  signature  of  a  duly  authorized  officer  of  the  accepting  bank, 
and  will  thereupon  be  detached  from  the  other  documents  for 
return  to  the  Chicago  firm,  to  be  diseoianted  by  them  immediately, 
if  they  prefer,  or  to  be  held  by  them  until  the  maturity  date 
thereof. 

In  the  ease  of  the  'acceptance  credit,'  the  conditions  at  Buenos 
Aires  under  which  the  credit  was  originally  opened  quite  likely 
specify  that  payment  is  to  be  made  some  days  prior  to  the 
actual  maturity  date  of  acceptance  at  New  York,  through  the 
medium  of  a  draft  to  be  drawn  by  our  Buenos  Aires  branch  upon 
the  Argentine  importer.  This  draft  is  given  an  earlier  maturity 
date  than  the  Chicago  draft,  in  order  to  enable  the  Buenos  Aires 
branch  of  the  bank  to  cable  the  funds  to  New  York  in  time  for 
the  New  York  office  to  meet  its  acceptance  of  the  draft  of  the 
Chicago  house. 

One  of  the  points  of  difference  between  the  ordinary  confirmed 
documentary  credit  and  the  'acceptance  credit'  is  that  under  the 


184       FOREIGN  TRADE  MARKETS  AND  METHODS 

former  it  is  not  always  necessary  for  the  American  sTiippcr  to 
draw  drafts,  the  conditions  of  the  credit  usually  instructing  the 
bank  to  pay  cash  against  receipt  of  documents,  the  bank  taking 
simply  the  receipt  of  the  shipper  for  payments  made  thereunder. 
This  receipt  may  consist  simply  of  the  endorsement  of  the  benefi- 
ciary on  the  bank's  check  for  the  amount  involved.  Under  the 
'acceptance  credit,'  however,  the  instructions  from  the  bank 
through  which  the  credit  was  originally  opened  to  the  bank  through 
which  it  is  to  be  made  available,  would  be  to  'accept'  the  draft 
of  the  American  shipper,  under  certain  specified  conditions,  such 
acceptance  by  the  bank  protecting  the  maker  of  the  draft,  in  the 
case  of  the  Argentine  merchant,  from  becoming  insolvent  before 
maturity  date.  The  recourse  of  the  New  York  bank  under  such 
a  contingency  would  be  to  the  foreign  bank  which  originally 
opened  the  credit  and  upon  the  instructions  of  which  acceptance 
was  made. 

The  illustration  here  given  covers  an  export  transaction;  the 
operation  for  an  import  transaction  is  the  same  with  simply  a 
reversal  of  the  various  incidental  steps. 


CHAPTER  XI 

IMPORTANCE    AND   ADVANTAGES   OF   KNOWING 
COMMERCIAL    LANGUAGES 

Interest  speaks  all  sorts  of  tongues. — Francis,  Due  de  la  Roche- 
foucauld. 

More  than  at  any  other  time  in  the  history  of  our  foreign 
trade  has  the  learning  of  a  foreign  language  for  commer- 
cial purposes  become  an  absolute  necessity.  More  and  more 
American  exporters  are  realizing  they  must  create  markets 
and  then  hold  them  in  competition  with  all  the  world  rather 
than  simply  send  goods  to  markets  that  have  been  already 
developed.  During  the  war  there  were  some  foreign 
markets  where  American  goods  were  well  known,  where 
the  buyers  often  had  English-speaking  representatives  to 
accommodate  the  exporter.  In  the  Far  East,  for  example, 
it  is  possible  to  conduct  nearly  all  our  foreign  transactions 
in  English.  This  is  due  to  the  craze  to  learn  English  which 
is  everywhere  apparent  among  Asiatics. 

In  certain  lectures  to  students  in  India  the  presiding 
officer  makes  the  statement  beforehand  that  the  lecturer 
will  speak  entirely  in  English  and  that  those  students  who 
do  not  understand  English  will  be  free  to  retire  at  any 
time.  The  result  is  that  every  student  holds  firmly  to  his 
seat  and  tries  to  look  interested  and  intelligent,  regardless 
of  whether  or  not  he  understands  a  word  of  the  lecture. 
Otherwise,  the  students  would  be  quite  inclined  to  go  out 
and  come  in  at  their  will  during  the  lecture,  according  to 
their  custom  in  some  parts  of  India. 

A  Chinese  student  in  Peking  advertised  in  a  daily  paper, 
"I  teach  English  as  far  as  the  letter  G." 

185 


186       FOREIGN  TRADE  MARKETS  AND  METHODS 

A  student  who  sat  beside  me  in  a  Tokyo  tram  ear  was 
very  desirous  of  impressing  me  "vvith  the  fact  that  he  was 
familiar  with  English.  He  held  Burke's  Reflections  of  tlie 
French  Revolution  close  to  his  face,  glancing  frequently 
at  me  to  discover  if  I  noticed  him  and  was  sufficiently 
impressed.  In  looking  more  closely  I  noticed  that  he  was 
reading  his  English  book  "bottom  side  up." 

While  this  eager  desire  for  a  knowledge  of  English  pre- 
vails in  the  Orient,  it  is  not  so  prevalent  in  other  foreign 
markets.  It  is  true  that,  during  the  period  of  the  war,  not 
only  such  countries  as  China  and  Japan  had  English- 
speaking  representatives  for  the  convenience  of  the 
exporter,  but  such  was  the  case  even  in  Latin  Am.erica 
where  a  digression  from  Spanish  and  Portuguese  is  seldom 
found.  However,  this  was  at  a  time  when  competition  was 
not  strong  and  when  the  exporter  was  often  sought  by  the 
buyer. 

Now  the  buyer  has  come  into  his  own  again,  he  will  not 
trouble  himseK  about  English;  the  exporter  must  learn 
the  language  of  the  customer.  Now  that  so  many  of  the 
powerful  nations  are  again  competing  for  the  sale  of  their 
products,  the  exporter  must  take  all  possible  aggressive 
measures.  There  is  great  need  for  capable  men  who  have 
the  adequate  training  and  requirements  to  carry  on  our 
world-wide  business. 

In  some  cases  men  who  are  otherwise  competent  lack 
one  of  the  main  requisites,  namely,  a  knowledge  of  foreign 
languages.  This  language  question  is  one  of  the  most 
serious  ones  in  world  market  studies.  In  order  to  become 
an  expert  in  any  area  an  individual  must  know  the  language 
of  that  area.  It  is  of  course  self-evident  that  language 
ability  will  not  fit  a  man  to  do  business  in  a  foreign  country 
any  more  than  a  knowledge  of  English  will  make  any  man 
a  good  salesman  in  America.  The  language,  however,  as  a 
means  of  carrying  on  the  business  is  absolutely  essential 
and  every  effort  must  be  put  forth,  to  learn  it  as  quickly 
as  possible.  Learning  to  read,  write  and  speak  a  foreign 
tongue  is  not  a  short  and  easy  task.    There  is  a  great  dif- 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES       187 

ferenee  between  an  effective,  fluent  use  of  a  language  and 
a  mere  smattering  knowledge  of  it.  However,  any  one  who 
applies  himself  diligently  and  earnestly  to  his  task  in  a 
surprisingly  short  period  of  time  can  acquire  a  working 
knowledge  of  it — the  rest  is  simply  a  matter  of  continued 
study  and  practice,  but  it  is  time  well  spent. 

A  salesman  going  to  foreign  markets  other  than  English- 
speaking  ones,  must  know  either  French  or  Spanish  if  he 
expects  to  compete  successfully  with  other  educated  sales- 
men. Of  the  ten  or  twelve  important  commercial  lan- 
guages, Spanish,  French  and  Portuguese  are  the  most 
generally  used.  If  any  solid  structure  of  foreign  commerce 
relationships  is  to  be  laid,  the  correspondents,  the  traveling 
agents  and  at  least  some  of  the  men  of  the  business  must 
be  equipped  to  write  and  to  converse  intelligently  on  any 
subject  in  Spanish  and  French  particularly,  and  in  Brazil 
and  Portugal,  Portuguese  is  essential. 

The  French  language  has  gained  considerably  in  com- 
mercial importance  since  the  war  and  on  the  whole  is 
one  of  the  most  important  foreign  language  for  Ameri- 
cans to  learn.  The  salesman  going  to  France,  Algeria, 
Morocco,  Belgium,  Switzerland,  Italy,  Austria  or  the  Bal- 
kan States  must  know  French.  While  French  is  not  the 
language  of  all  these  countries,  it  is  the  medium  through 
which  business  can  best  be  transacted  in  all  of  them.  Now 
that  America  is  trying  to  enter  the  markets  of  the  Near 
East  where  French  has  long  been  the  international  language 
and  since  in  South  America  large  numbers  of  Latin 
Americans  converse  easily  in  this  tongue,  the  importance 
of  French,  as  a  commercial  language,  is  more  and  more 
apparent.  But  French  is  used  far  more  extensively  than 
solely  in  French  territory.  "We  find  it  the  language 
of  commercial,  social  and  diplomatic  circles  in  Switzerland, 
Spain,  Portugal,  Italy,  Greece,  the  Balkans,  Turkey,  Asia 
Minor,  Persia,  Russia,  The  Far  East  and  Latin  America. 
It  has  long  been  la  langue  diplomatique  and  employed  at 
virtually  all  international  conventions.  Add  to  this  the 
fact  that  it  is  a  Romance  language  based  upon  Latin  and 


188       FOREIGN  TRADE  MARKETS  AND  METHODS 

a  knowledge  of  it  makes  the  acquisition  of  any  of  the  other 
Romance  languages  such  as  Spanish,  Italian,  or  Portuguese 
so  much  the  easier,  the  distinct  advantage  of  any  one  pos- 
sessing a  knowledge  of  it  is  evident. 

Spanish  is  probably  the  next  most  important  foreign 
commercial  language,  and  the  study  of  it  is  playing  a 
much  more  important  role  in  our  educational  institutions 
than  heretofore.  It  is  the  means  of  oral  communication 
of  two-thirds  of  the  Americans  who  do  not  speak  our 
language  and  with  a  thorough  knowledge  of  it  one  can 
easily  learn  Portuguese,  the  language  of  the  other  third. 
It  is  the  language  of  Spain,  Mexico,  Central  America,  Cuba 
and  the  West  Indies,  and  nearly  all  of  South  America  with 
the  exception  of  Brazil.  Together  with  English  it  is  the 
principal  language  of  the  Philippines.  It  is  considered  by 
many  as  unquestionably  the  most  important  commercial 
language  for  North  Americans  to  study. 

To  realize  the  commercial  value  of  Spanish,  we  need 
only  to  consider  that  from  1900  to  1913  the  total  of  all 
South  American  imports  for  all  the  world  increased  from 
$318,000,000  to  $1,042,000,000.  This  increase  was  at  the 
rate  of  227  per  cent  as  compared  with  an  increase  of  107 
per  cent  in  our  own  imports  and  of  100  per  cent  in  the 
trade  of  the  whole  world  in  the  same  period.  During  this 
time  the  population  of  Spanish  America  grew  from  38,000,- 
000  to  nearly  60,000,000,  approximately  58  per  cent  increase 
as  compared  with  28  per  cent  in  the  United  States.  The 
imports  of  South  America  in  1913  averaged  about  $18.68 
per  capita  in  comparison  with  $17.94  per  capita  importa- 
tions in  the  United  States.  These  figures  plainly  show  the 
purchasing  power  of  Latin  America  before  the  World  War. 

In  order  to  give  some  idea  of  the  possibilities  for  the 
future  development  of  the  South  American  countries,  we 
state  some  of  the  facts  from  Geography  Class  by  Dan 
Ward,  in  the  World  Outlook  for  February,  1915.  Peru 
is  the  size  of  Spain,  France,  Italy  and  Germany  combined. 
Sixty  Belgiums  could  be  contained  in  Bolivia,  still  the 
latter  has  only  one-third  of  Belgium's  population.     Chile 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES        189 

is  as  long  as  from  New  York  to  San  Francisco  and  from 
87  to  250  miles  wide.  All  of  the  United  States  except 
Alaska  could  be  contained  in  Brazil  and  there  would  still 
be  a  remainder  of  200,000  square  miles  of  Brazilian  terri- 
tory. Argentina  has  progressed  more  rapidly  in  the  last 
ten  years  than  Iowa  or  Illinois  in  the  last  fifty  years. 
Buenos  Aires  (with  1,560,163  people)  at  the  present  rate 
of  increase,  will  pass  Chicago  in  1930  and  be  the  second 
city  in  size  in  the  Western  Hemisphere,  Mexico  City  and 
Sao  Paulo  have  approached  the  half  million  mark  and  six 
other  cities  either  reached  or  passed  the  quarter  million 
mark.  These  are  only  a  few  reasons  why  we  should  be- 
come acquainted  as  soon  as  possible  with  Latin  American 
civilization,  peoples  and  languages. 

In  learning  a  new  tongue,  one  does  not  merely  acquire 
a  knowledge  of  the  language.  An  entirely  new  field  is 
opened  to  the  student  and  he  gains  an  insight  into  the 
course  of  mental  development  of  the  race.  He  has  access 
to  the  heart  and  mind  of  the  people.  He  learns  their 
ideals,  manners  and  customs.  He  gets  a  broader  and  more 
sympathetic  understanding  of  mankind.  He  becomes 
acquainted  with  a  new  point  of  view,  new  mentality,  new 
social  usages,  all  of  which  is  a  distinct  asset  to  his  inter- 
national equipment.  He  learns  to  think  internationally. 
Too  often  has  the  complacent  American  had  a  tendency 
to  disregard  the  importance  of  other  languages.  This  con- 
dition is  to  be  expected  in  our  country  where,  in  a  district 
of  hundreds  of  thousands  of  square  miles,  English  is  the 
only  language  of  significance.  Too  often  has  he  had  a 
feeling  of  superiority  over  other  nations  which  has  been 
a  decided  detriment.  In  studying  a  new  language  he  can- 
not help  but  acquire  a  broader  outlook,  overcome  his  former 
prejudices  and  on  the  whole  have  a  more  comprehensive 
understanding  of  the  world  at  large.  He  will  then  appre- 
ciate that  there  are  millions  whose  view  point  is  wholly 
different  from  ours  and  will  make  allowances  for  such 
differences. 

Primarily  language  is  a  tool  and  not  a  decoration — it 


190       FOREIGN  TRADE  MARI^TS  AND  METHODS 

is  for  use  and  not  for  cultural  grace.  The  student  of 
foreign  trade  is  learning  the  language  principally  to  be 
able  to  sell  goods  and  conduct  his  business,  but  while  learn- 
ing, the  language  becomes  a  living  thing  to  him  and  the 
cultural  value  is  not  lost.  The  literature  of  that  country- 
no  w  becomes  a  delight.  Many  who  understand  a  foreign 
language  know  the  joy  of  reading  a  masterpiece  in  the 
original  and  then,  for  the  sake  of  comparison,  sensing  a 
keen  loss  when  reading  a  translation  of  it  in  their  own 
tongue,  regardless  of  how  fine  that  translation  may  be. 
Practical  men  are  too  prone  to  disregard  this  cultural 
value.  Because  one  is  a  business  man  it  does  not  follow 
that  he  should  be  solely  interested  in  trade  matters  and 
commercial  subjects.  He  should,  of  course,  have  a  thor- 
ough knowledge  of  his  own  field,  but  at  the  same  time  if 
he  is  versatile  and  has  read  widely  and  intelligently  on 
many  subjects  he  will  find  it  a  distinct  advantage. 

Particularly  does  this  appertain  to  Latin  America  where 
such  subjects  as  art,  literature,  politics  and  history  are 
especially  appreciated  and  where  business  has  often  been 
secured  through  a  friendship  established  not  by  brilliant 
salesmanship,  but  through  some  common  interest  apart 
from  cold  business. 

In  Latin  America  a  salesman  can  hardly  expect  to 
accomplish  more  than  a  mere  superficial  skimming  of  the 
surface  if  he  cannot  speak  Spanish,  and  any  firm  sending 
out  such  a  salesman  can  hardly  be  taking  the  export  prob- 
lem very  seriously.  The  use  of  an  interpreter  has  been 
found  very  unsatisfactory.  It  places  the  salesman  in  an 
awkward  and  dependent  position.  He  cannot  possibly 
establish  any  friendship  where  there  is  no  common  medium 
for  an  intimate  exchange  of  thoughts.  On  the  other  hand, 
the  presence  of  the  interpreter  produces  the  wrong  psycho- 
logical effect.  The  foreigner  cannot  help  but  feel  he  is 
dealing  with  people  whom  he  does  not  really  know  and 
with  whom  he  is  not  on  familiar  ground.  The  personal 
element  is  almost  entirely  lost  and  usually  the  business  also. 
We  all  know  the  importance  of  the  personal  element  in 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES      191 

conducting  domestic  business  and  it  must  be  remembered 
that  language  is  the  root  of  the  personal  element.  Any 
successful,  permanent  business  in  South  America  must  be 
done  by  the  use  of  the  language  of  the  country  in  which 
the  business  is  transacted.  The  Germans  and  the  English 
have  shown  the  way  in  this  respect  by  the  careful  train- 
ing of  their  men  in  the  speaking  as  well  as  the  reading 
of  Spanish  and  Portuguese  before  they  reach  Latin 
America.  Now  that  these  nations  are  competing  again 
vigorously  for  Latin  American  trade,  it  is  more  urgent 
than  ever  if  we  wish  to  maintain  the  trade  built  up  with 
these  countries  during  the  war,  that  our  salesmen  shall  not 
be  outclassed  by  competitors  solely  on  account  of  their 
lack  of  linguistic  equipment.  This  is  a  position  no  self- 
respecting  salesman  would  care  to  be  placed  in  and  he 
could  not  help  but  feel  that  he  was  doing  his  firm  the 
grossest  injustice  because  of  this  incompetency. 

The  majority  of  students  make  the  mistake  of  supposing 
that  all  South  America  is  alike.  They  think  Spanish  is 
the  prevailing  language  of  South  America  and  believe  that 
a  knowledge  of  it  will  give  them  access  to  every  part  of 
that  continent.  They  are  entirely  ignorant  of  the  fact 
that  the  official  language  of  Brazil,  a  republic  as  large  as 
the  United  States  with  the  exception  of  Alaska,  is  Por- 
tuguese. It  is  most  important  to  realize  that  the  republics 
of  South  America  differ  as  -widely  as  the  separate  states 
of  Europe,  in  race,  habits  and  ideals.  Even  their  govern- 
ments, although  fundamentally  the  same,  are  quite  dis- 
similar. 

Because  of  the  growing  and  future  importance  of  trade 
relations  with  Brazil,  that  leviathan  republic  of  South 
America  with  some  25,000,000  inhabitants,  one  can  readily 
see  the  necessity  of  a  knowledge  of  Portuguese.  Add  to 
this  that  there  is  more  unexplored  territory  in  Brazil  than 
in  all  the  rest  of  the  world  put  together;  that  four-fifths 
of  the  world's  coffee  comes  from  that  country  and  that  Rio 
de  Janeiro  has  a  population  of  1,128,637  people.  All  of 
these  facts  emphasize  the  importance  of  Portuguese  as  a 


192       FOREIGN  TRADE  MARKETS  AND  METHODS 

commercial  language.  When  we  consider  that  there  are 
only  three  tongues  which  are  used  as  national  languages 
in  the  important  nations  of  this  hemisphere  [English, 
Spanish  and  Portuguese],  it  is  very  strange  that  German 
has  been  much  more  widely  taught  in  our  schools  than 
Spanish  which  is  second  only  to  English  in  the  language 
of  the  Americas,  and  comparatively  little  Portuguese. 
Something  must  be  done  to  overcome  the  old  traditions  in 
our  schools  and  give  these  languages,  Spanish  and  Por- 
tuguese, the  place  they  deserve  in  the  curriculum.  Por- 
tuguese is  the  language  used  in  Portugal,  Brazil,  the 
Spanish  Province  of  Galicia,  the  Cape  Verde  Islands,  Por- 
tuguese Guinea  and  other  Portuguese  colonies  and  is  often 
regarded  as  third  in  commercial  importance.  It  is  the 
most  Latinized  of  the  Latin  tongues  and  is  less  musical 
than  any  of  them.  In  its  form  it  resembles  Spanish,  its 
nearest  neighbor,  more  than  it  does  any  of  the  other 
Eomance  languages,  but  it  is  considered  by  many  as 
much  more  difficult  and  intricate.  It  has  more  vowel  and 
consonant  sounds  and  its  pronunciation  is  much  more 
arbitary.  Using  Spanish  in  Brazil  for  commercial  purposes 
has  a  disparaging  effect,  since  it  makes  the  Brazilians  feel 
that  we  do  not  think  their  country  important  enough  to 
learn  its  language. 

It  would  be  possible,  of  course,  for  an  American  firm  to 
engage  a  foreign  agent  thoroughly  familiar  with  the  lan- 
guage and  general  conditions  of  the  local  market.  This, 
however,  is  not  wholly  satisfactory.  The  personality  of 
the  American  business  man  is  known  the  world  over.  His 
character  stands  for  something  distinct  from  all  other  busi- 
ness men.  In  choosing  a  foreigner  as  a  local  salesman,  one 
naturally  cannot  expect  him  to  be  as  enthusiasmc  as  an 
American  selling  American  goods  and  at  the  same  time 
there  cannot  be  the  same  loyalty  of  the  foreigner  to  the 
American  firm. 

Trade  Commissioner  Eliot  S.  Mears  in  discussing  this 
problem  gave  an  interesting  example  of  employing  local 
salesmen  in  the  Levant.    In  this  particular  district  he  says : 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES       193 

The  two  great  mistakes  now  being  made  are  the  general  choice 
of  a  foreigner  of  local  origin  or  of  a  foreigner  who  merely 
speaks  any  language  other  than  English,  irrespective  of  its  use 
in  the  particular  locality.  An  Armenian  or  Greek  or  Jew  or 
Turk,  irrespective  of  whether  he  has  been  naturalized  or  whether 
he  represents  a  bona  fide  American  company,  is  never  regarded 
in  commerce  abroad  as  an  Ajnerican.  He  is  still  a  Levantine  and 
business  negotiations  with  him  are  conducted  on  that  plane. 

Although  this  applies  to  the  Levant,  it  is  logical  to 
assume  that  it  applies  to  other  foreign  countries  as  well. 
As  long  as  the  character  of  our  American  business  men  is 
regarded  as  important  by  others  it  would  be  absurd  not  to 
recognize  the  value  of  it  and  make  use  of  it. 

AU  of  this  merely  emphasizes  the  importance  of  the 
American  business  man  learning  foreign  languages.  As 
has  been  previously  stated  there  are  ten  or  twelve  important 
commercial  languages  and  when  we  consider  that  in  each 
one  of  these  there  may  be  fifty  different  trade  vocabularies, 
the  impossibility  of  any  one  person  studying  languages 
for  world  trade  in  general  is  seen  at  once.  Aside  from 
those  areas  where  French,  Spanish  and  Portuguese  are 
spoken,  there  are  many  divisions  of  the  world  where  it  will 
be  necessary  to  learn  to  speak  new  and  sometimes  little 
known  tongues.  This  is  no  difficult  task  in  our  large 
American  cities.  The  individual,  moreover,  who  is  already 
engaged  in  business  cannot  usually  choose  to  learn  the 
language  which  appeals  to  him  most — his  choice  is  largely 
determined  for  him.  His  firm  may  be  dealing  largely  with 
Latin  America,  in  which  case  he  would  naturally  study 
Spanish  or  Portuguese.  However,  if  his  house  were  inter- 
ested in  doing  business  with  Russia,  it  would  be  to  his 
advantage  to  study  Russian. 

In  some  of  our  institutions  the  need  of  teaching  Russian 
from  the  commercial  point  of  view  has  been  felt  but  in 
comparison  with  England  and  even  Scotland,  the  number 
of  Americans  interested  in  the  study  of  this  language  is 
practically  negligible. 

In  the  United  States  we  find  a  mere  handful  studying 


194       FOREIGN  TRADE  MARKETS  AND  METHODS 

the  Russian  tongue  whereas  in  England  as  far  back  as  1917 
the  number  of  students  engaged  in  the  study  of  Russian 
totaled  1,862  and  in  Scotland  in  the  same  year  566  students 
of  Russian  were  reported;  while  in  Germany  hundreds  are 
now  reported  as  studying  Russian  in  preparation  for  a 
Russian  commercial  invasion.  When  we  consider  that 
Russia  has  a  population  of  180,000,000  in  comparison  with 
80,000,000  in  Latin  America  and  occupies  one-seventh  of 
the  world's  total  area,  the  advisability  of  following  the 
example  set  by  these  nations  is  quite  obvious.  It  has  been 
predicted  by  well-informed  men  of  world  affairs  that  within 
ten  years  our  commercial  relations  with  Russia,  including 
Siberia,  will  greatly  exceed  those  with  all  of  Latin  America. 
This  prophecy  is  based  upon  the  enormous  population  and 
the  potential  purchasing  power  in  Russia.  When  order  and 
industry  prevail  in  this  vast  country  there  is  certain  to  be 
a  vast  growth  in  her  trade  and  commerce  with  the  rest  of 
the  world.  There  will  then  be  large  opportunities  for 
those  who  have  had  the  foresight  to  study  Russian.  It  is 
a  very  difficult  language  to  learn  and  there  are  compara- 
tively few  good  teachers  available.  In  many  instances  in 
the  larger  cities  Russians  can  be  found  and,  by  seeking 
them  out,  any  one  who  so  desires  has  an  opportunity  to 
study  conversational  Russian  with  them.  Frequently 
advantageous  exchanges  can  be  made — Russian  in  exchange 
for  English. 

The  commercial  importance  of  the  German  language  will 
depend  of  course  on  the  commercial  importance  of  Ger- 
many itself  in  the  future.  While  the  military  and  political 
power  of  Germany  has  been  broken,  Germany  in  the  course 
of  time  will  surely  come  to  play  an  important  role  among 
the  nations  of  the  world  and  her  language  will  be  cor- 
respondingly important.  German  is  not  only  the  language 
of  Germany  and  Austria  with  some  70,000,000  people,  but 
for  commercial  purposes  is  the  most  important  foreign 
language  in  Holland,  Norway,  Denmark,  Sweden  and  Fin- 
land. 

No  words  of  encouragement  should  be  needed  to  stimulate 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES       195 

the  study  of  the  language  of  Dante.  As  far  as  the  Italian 
language  is  concerned,  Italy  ranks  sixth  among  the  coun- 
tries of  Europe  with  respect  to  population,  coming  next 
to  France  with  a  population  of  35,000,000  people.  The 
language  is  of  commercial  importance  not  only  in  Italy, 
but  throughout  the  Mediterranean  region  and  particularly 
in  Greece,  Turkey,  Asia  Minor  and  North  Africa. 

In  considering  Chinese  and  Japanese,  what  we  have  pre- 
viously stated  regarding  the  Russian  tongue  applies  also 
in  the  main  to  a  study  of  Chinese  and  Japanese.  China, 
the  giant  of  the  East,  has  a  population  of  practically 
411,000,000  people.  While  their  purchasing  power  per 
capita  is  small,  in  the  aggregate  it  is  large.  China's  trade 
has  been  steadily  increasing  and  will  continue  to  grow  as 
soon  as  railway  facilities  enable  the  Chinese  producer  to 
dispose  of  his  surplus  products  to  the  foreign  trader.  This 
cannot  be  accomplished  at  once,  since  the  cost  of  trans- 
portation is  extremely  high.  In  order  to  convey  some 
impression  of  what  the  future  has  in  store  for  China,  we 
quote  from  an  official  report: 

To  form  an  idea  of  what  future  prospects  are,  it  is  fair  to 
make  a  comparison  with  India.  The  areas  of  the  two  empires 
are  almost  identical  and  their  products  very  similar.  But  China 
has  a  larger,  more  industrious  and  more  intelligent  population; 
while  on  the  whole,  the  country  is  probably  more  fertile  and 
possesses  greater  mineral  resources.  In  the  former  country  trade 
is  assisted  by  good  roads,  railways,  and  lightness  or  absence  of 
taxation;  in  the  latter,  at  present,  it  is  hampered  by  directly 
opposite  conditions.  The  result  is  that  the  exports  from  India 
are  worth  tliree  times  the  exports  from  China.  With  equal 
opportunities,  which  the  building  of  railways  and  opening  of 
mines  will  bring  about,  the  discrepancy  should  disappear. 

With  the  help  of  Western  capital  and  leadership  China 
will  become  an  increasingly  important  commercial  power; 
those  who  will  be  able  to  communicate  directly  with  her 
will  have  a  distinct  advantage  in  her  developing  commerce. 
Our  trade  with  Japan  at  present  is  already  large  and 


196       FOREIGN  TRADE  MARKETS  AND  METHODS 

will  no  doubt  continue  to  grow  rapidly  as  it  has  in  th.e 
past.  A  knowledge  of  Japanese  would  be  of  great  value 
to  any  one  carrying  on  business  with  the  "Sunrise  King- 
dom." Like  Kussian,  Chinese  and  Japanese  are  very  dif- 
ficult languages  to  learn  and  competent  teachers  are  scarce. 
However,  any  one  who  is  sufficiently  interested  can  usually 
find  a  means  for  accomplishing  his  end. 

To  those  who  have  no  access  to  personal  teachers,  cor- 
respondence courses  in  the  important  commercial  languages 
are  offered  by  many  university  extension  departments  and 
private  schools.  By  this  method  a  student  can  at  least 
acquire  a  reading  and  writing  knowledge  of  the  language 
which  will  enable  him  to  learn  the  spoken  language  more 
readily. 

In  this  connection  there  are  phonograph  language  courses 
which  produce  good  results  by  affording  practice  in  the 
spoken  language.  The  best  known  of  these  is  perhaps  the 
Cortina  Method. 

For  the  benefit  of  those  who  may  be  interested  in  lan- 
guage study  we  give  the  following  texts  and  references 
in  the  various  important  commercial  languages.  These 
books  have  been  carefully  selected  and  many  of  them  have 
proved  valuable  in  their  use  and  practical  application  in 
the  larger  commercial  educational  institutions.  In  the  case 
of  French,  Spanish  and  German,  for  such  students  who  have 
acquired  a  reading  knowledge  of  the  language  and  who 
are  anxious  to  continue  their  study  with  more  difficult 
texts,  we  have  added  a  list  of  novels  and  other  interesting 
reading  material.  For  a  general  comprehensive  commer- 
cial dictionary  we  suggest  Pitman's  Dictionary  of  Com- 
mercial Correspondence  in  Seven  Languages,  covering 
English,  French,  German,  Spanish,  Italian,  Portuguese  and 
Russian. 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES       197 


BOOKS  AS  AIDS  FOR  ACQUIRING  LANGUAGES 

French : 
Aldrich  &  Foster:  Elementary  French. 
Becker  &  Poole:  Commercial  French  Reader. 
Bercy,  Paul:   Le  Fra/ngais  Pratique.      (New   York,  Jenkins, 

$1.10.) 
BiERMAN  &  Frakk:  Con/versational  French  Reader.     (AUyn 

&  Bacon.) 
Blanchaud  :  Progressive  French  Idioms.     (D.  C.  Heath  &  Co., 

$.60.) 
Chaedenal:  French  Grammar. 

CORNETT,  W.  N. :  French  Commercial  Correspondence.     (Mil- 
waukee, Casper,  $.75.) 
Dann    &    Courvoiee:     French    Commercial    Correspondence. 

(London,  Asher  &  Co.,  13  Bedford  Street.) 
Downer,  Charles  A.:  A  First  Book  in  French.    (D.  Appleton 

&  Co.,  $1.60.) 
Fontaine:  Livre  de  Lecture  et  de  Conversation.     (D.  C.  Heath 

&  Co.,  $.90.) 
FRAN901S,  Victor:   Introductory  French  Prose   Composition. 

(American  Book  Co.) 
Fraser  &  Squair:  Complete  French  Grammar.     (D.  C.  Heath 

&  Co.,  $1.15.) 
Gaudel,  V.  D. :   The  Ideal  System  for  Acquiring  a  Practical 

Knowledge  of  French.     (Published  by  the  author  at  121  W. 

70th  Street,  N.  Y.  C,  $1.50.) 
Graham  &  Oliver:  Commercial  Correspondence,  Parts  I  and 

II. 
HOLBROOK^  R.  T. :  Course  in  Living  French.     (Ginn,  $1.40.) 
Hotchkiss:   Le  Premier  Livre  de  Frangais.      (D.   C.  Heath 

&  Co.,  $.35.) 
KORTS,  G. :  Commercial  Term.     (London,  Hachette.) 
Maloubier  &  Moore:  First  Book. 
Patterson,  W.  R.:  Colloquial  French.     (E.  P.  Dutton  &  Co., 

$1.25.) 
Raux:  Elementary  French  Reader. 
Thimm,  Franz:  Easy  Method  for  Learning  French  Quickly. 

(New  York,  Wehman  Bros.) 


198       FOREIGN  TRADE  MARKETS  AND  METHODS 

The  following  books  published  by  I.  Pitman  &  Sons  will 
be  of  use,  for  commercial  purposes : 

Pitman:  Commercial  French  Grammar. 

— French  Commercial  C orrespondence. 

— French  Commercial  Reader. 

— Mercantile  Correspondence,  English-French. 

We  would  also  suggest  material  from  Le  Temps,  Le 
Matin,  L' Illustration  or  La  Revue  Bleue  as  well  as  any  of 
the  following: 

Benton:  Easy  French  Plays. 
Bruno:  Le  Tour  de  la  France. 
Daudet:  Le  Petit  Chose. 
Hal^vy:  L'Abbe  Constantin. 

Hugo:  Quatre-vingt-treize  and  also  Les  Miserables. 
LoTi,  Pierre:  Pecheur  d'Islande. 
Moliere:  Le  Bourgeois  Gentilhomme. 
— L'Avare. 

Krone  :  Le  Petit  Parisien. 
Lavisse:  Histoire  de  France. 
Malot:  Sans  Famille. 

Osgood:  La  France  Hero'ique.     (D.  C.  Heath  &  Co.) 
Pattou:  Causeries  en  France.     (D.  C.  Heath  &  Co.,  $.70.) 
Tourists'  Vade  Mecum  of  French  Colloquial  Conversation.     (I. 
Pitman  &  Sons.) 

For  a  good  dictionary  we  recommend  the  following: 

Heath:  French  Dictionary  ($1.50.) 

Smith_,  F.  W.  :  French-English  and  English-French  Commer- 
cial Dictionary.     (I.  Pitman  &  Sons.) 

Spiers  &  Surenne:  Complete  French  and  English  Dictionary. 
(D.  Appleton  &  Co.,  $2.50.) 

Wessly,  J.  E.:  French-English  Dictionary.  (A.  L.  Burt  Co., 
$1.00.) 

Spanish : 
Allen  &  Castillo:  Spanish  Life.     (Henry  Holt  &  Co.) 
Bonilla:  Spanish  Daily  Life. 
BroomhalL;  E.  J. :  Spoken  Spanish.    ( AUyn  &  Bacon,  $.60.) 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES       199 

De  Tornos,  a.:  Combined  Spanish  Method.   (Appleton,  $2.00.) 

EsPiNOSA,  A.  M. :  Advanced  Composition  and  Conversation. 
(Sanborn  &  Co.) 

FUENTES  &  Elias:  Manual  de  Correspondencia  Commercial. 

FuENTES  &  Francois:  Practical  Spanish  Grammar. 

GiESE,  W.  F. :  J.  First  Spanish  Book  and  Reader.  (D.  Apple- 
ton  &  Co.,  $1.72.) 

Graham  and  Oliver:  Spanish  Commercial  Practice.  (Mac- 
millan  Co.,  Part  I,  $.75,  Part  II,  $1.05.) 

Harrison^  E.  S.  :  A  Spanish  Commercial  Reader.  (Ginn  & 
Co.,  $.96.) 

Harrison  :  Spanish  Correspondence.    (Henry  Holt  &  Co.,  $.75.) 

Hills'  and  Ford:  First  Spanish  Course.  (D.  C.  Heath  & 
Co.,  $1.28.) 

Luria:  Correspondencia  Commercial.  (Silver,  Burdett  &  Co., 
$1.25.) 

MacDonalDj  G.  R.  :  Lessons  in  Spanish  Commercial  Cor- 
respondence.    (I.  Pitman  &  Sons.) 

McHale,  C.  F.  :  Commercial  Spanish.  (D.  C.  Heath  &  Co., 
$1.48.) 

— Spanish  Taught  in  Spanish.     (Houghton  Mifflin  Co.,  $1.00.) 

Nelson,  Ernesto:  The  Spanish  American  Reader.  (D.  C. 
Heath  &  Co.) 

PiTTARO,  John  M.  :  A  Spanish  Reader.  (D.  C.  Heath  &  Co., 
$1.32.) 

ROESSLER  AND  Remy  :  First  Spanish  Reader.  (American  Book 
Co.) 

Romero^  T.  :  Spamsh,  Commercial  and  Professional.  (D. 
McKay,  Philadelphia,  $.75.) 

— Spanish  in  a  Week.     (Philadelphia,  $.50.) 

Sinagran:  Foundation  Course  in  Spanish,  Parts  I,  II,  III. 
(Macmillan  Co.) 

Toledano  :  Commercial  Spanish  Grammar.    (I.  Pitman  &  Sons. ) 

Turrell:  Spanish  Reader.     (American  Book  Co.,  $.72.) 

Umphrey:  Spanish  Prose  Composition.  (American  Book  Co., 
$.69.) 

WiLKiNS^  L.  A.:  Elementary  Spanish  Prose  Book.  (Sanborn 
Co.) 

Ybarra,  a.:  a  Practical  Method  of  Learning  Spanish.  (D. 
C.  Heath  &  Co.,  $1.00.) 

— Spanish  Business  Conversations  and  Interviews.  (I.  Pit- 
man &  Sons.) 


200       FOREIGN  TRADE  MARKETS  AND  METHODS 

For  practical  application  extracts  from  the  daily  news- 
paper, La  Prensa,  are  recommended.  For  interesting  read- 
ing we  suggest  the  following: 

Alarcon:  El  Capitan  Veneno.    (D.  C.  Heath  &  Co.) 

—Novelas  Cortas.     (D.  C.  Heath  &  Co.,  $.42.) 

Bardin,  James,  editor:  El  Reina  des  los  Incas  del  Peru.   (Allyn 

&  Bacon,  $1.00.) 
Benavente,  Jacinto:   Tres  Comedias.     (D.  C.  Heath  &  Co., 

$.72.) 
COESTER,  Alfred:   Cuentoa  de   la  America  Espanola.     (Ginn 

&  Co.) 
Dorado,  Carolina:  Espana  Pintoresca.     (Ginn  &  Co.,  $.96.) 
Galdos:  Dona  Perfecta. 

Ibanez^  Blasco:  La  Batalla  del  Marne.     (D.  C.  Heath  &  Co.) 
Isaacs,  Jorge:  Maria.     (Ginn  &  Co.) 
Laguardia  and  Laguardia:  Argentina — Legend  and  History. 

(Sanborn  &  Co.,  $1.25.) 
Taboada:  Cuentos  Alegres.     (D.  C.  Heath  &  Co.) 
— Zaragueta.     (Silver  Burdett  &  Co.) 
— El  Comendador  Mendoza.     (American  Book  Co.,  $.75.) 

For  a  good  dictionary  any  one  of  the  following : 

Appleton:  New  Spanish-English  and  English-Spanish  Dic- 
tionary, indexed  by  A.  Cuyas.     (D.  Appleton  &  Co.,  $3.50.) 

MacDonald,  G.  R.  :  Spanish-English  and  English-Spanish  Com- 
mercial Dictionary.     (I.  Pitman  &  Sons.) 

McLaughlin:  New  Pronouncing  Dictionary.  (Philadelphia, 
D.  McKay,  $1.50.) 

Portuguese : 

Branner,   John   C.  :   A   Brief   Grammar  of   the  Portuguese 

Language.     (Henry  Holt  &  Co.,  $1.50.) 
— Segundo  Livre  de  Leitura. 
Da  Cunha,  E.  :  Portuguese  Self-Taught.     (New  York,  Stechert, 

$.75.) 
Elwes,  Alfred:  Portuguese  Grammar.     (Appleton,  $1.50.) 
Elwes,  Alfred:  Portuguese  English  and  English  Portuguese 

Dictionary.     (Appleton,  $3.50.) 
Ely,  L.  :  Portuguese   Conversational  Grammar.      (New  Yorkj 

Stechert,  $1.50.) 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES       201 

Escobar,  J.  F. :  New  Methods  to  Learn  tht  Portuguese  Lan- 
guage without  Teacher.  (Published  by  the  author  at  New 
Bedford,  Mass.,  $2.00.) 

Garva:  Prosas  Simples. 

Goodell:  Commercial  Reader. 

MacDonald,  G.  R.  :  Lessons  in  Portuguese  Commercial  Cor- 
respondence.    (I,  Pitman  &  Sons.) 

Manual  of  Portuguese  and  English  C onversation.  (Obtainable 
from  Stechert,  N.  Y.,  $.50.) 

Pitman:  Mercantile  Correspondence,  English-Portuguese.  (I. 
Pitman  &  Sons.) 

Thomas,  Frank:  A  Portuguese  Grammar  (Hossf eld's  Method). 
(Philadelphia,  P.  Reilly,  $1.25.) 

ToLEDANO,  C.  A.  &  Toledano,  A. :  A  Practical  Grammar  of 
the  Portuguese  Language.     (I.  Pitman  &  Sons.) 

The  best  dictionary  is  A  New  Dictionary  of  tJie  Por- 
tuguese and  English  Languages  by  H.  Michaelis  which  con- 
tains not  only  the  expressions  from  the  language  of  daily 
life  but  also  many  technical  terms  used  in  commerce  and 
industry  and  in  the  arts  and  sciences.  It  is  published  in 
two  volumes  by  I.  Pitman  &  Sons;  the  first  volume  being 
devoted  to  Portuguese-English  and  the  second  to  English- 
Portuguese. 

German: 
Baumback:  Die  Nonna. 
Bierwirth:  The  Elements  of  German. 

BiTHELL,  Jethro:   Handbook   of   German    Commercial    Cor- 
respondence.    (Longmans,  Green  &  Co.) 
Collins,  Bagster:  First  Book  in  German. 
EiCHENDORF :  Aus  dem  Lehen  eines  Taugenichts. 
Frettag:  Die  Joumalisten  and  also  Sell  und  Haben. 
Fulda:  Unter  vier  Augen. 
Gerstacker  :  Germelshausen. 

Graham:  German  Commercial  Practice.     (Macmillan  Co.) 
Grossman:  Practical  Guide  to  German  Pronunciation. 
Harris:  German  Lessons.     (D.  C.  Heath  &  Co.,  $.60.) 
Joynes:  Wesselhoeft  Grammar. 
Keller:  Romeo  und  Julia  auf  dem  Dorfe. 
Kron:  German  Daily  Life. 


202       FOREIGN  TRADE  MARKETS  AND  METHODS 

KuTNER,     Arnold:      German     Commercial     Correspondence. 

(American  Book  Co.) 
Lambert  :  Handbook  of  German  Idioms. 
Leander  :  Trdumereien. 
Lessing  :  Minna  von  Barnhelm. 

LUTZ:  An  Elemsntary  German  Reader.   (Silver,  Burdett  &  Co.) 
Meissner:  Aus  meiner  Welt. 
Pattou:   An  American  in   Germany.      (D.   C.   Heath  &  Co., 

$.70.) 
Pope:  Writing  and  Speaking  German.     (Henry  Holt  &  Co.) 
Riehl:  Flueh  der  Schonheit. 

Roessler:  a  First  German  Beader.     (American  Book  Co.) 
Schiller:  Wilhelm  Tell. 
Seeligman:  Altes  und  Neues. 
Storm:  Immensee  and  also  In  St.  Jurgen. 
Thomas:  A  Practical  German  Grammar. 
Wiehr:    German    Prose    Composition.       (Oxford    University 

Press.) 
Wildenbruch:  Das  Edle  Blut  and  also  Der  Letzte. 
ZiNNACKER :  Deutsch  fiir  Anf anger.     (D.  C.  Heath  &  Co.) 
Reading  of  the  New  Yox'k  Staatszeitung. 
For   a   practical   dictionary   we   recommend   Heath's   German 

Dictionary  by  E.  Wier,  $1.50. 

Italian : 

Arbib-Costa:  Italian  Lessons  and  Advanced  Italian  Lessons. 

Connor,   J. :   Conversation  Book  in  English  and  Italian  for 
the  Use  of  Schools  and  Travelers.     (Brentano,  $.60.) 

Elwes,  Alfred:  Italian  Grammar.   (D.  Appleton  &  Co.,  $1.50.) 

Hossfeld:  English  and  Italian  Dialogues.     (P.  Reilly,  $.45.) 

— Idiomatic  Italian  Composition.     (P.  Reilly,  $.60.) 

— Italian  Conversation  Grammar,  Method  Gaspey-Otto-Sa/uer, 
(Brentano,  $1.00.) 

Marinoni,  A. :  Italian  Reader. 

Melzi:    Italian-English,   English-Italian   Dictionary.      (Phila- 
delphia, P.  Reilly,  $2.00.) 

MOTTi,    PiETRO;    Elementary    Italian    Grammar.      (Brentano, 
$.50.) 

Phelps:  An  Italian  Grammar.     (Ginn  &  Co.) 

Pitman:  Mercantile  Correspondence  English-Italian.     (I.  Pit- 
man &  Sons.) 


IMPORTANCE  OF  COMMERCIAL  LANGUAGES      203 

RiCCi,  Luiei:  Pitman's  Commercial  Italian  Grammar.  (I.  Pit- 
man &  Sons,  $L10.) 

Rota,  A. :  New  Practical  Method  for  Learning  the  Italian 
Language,  Eossfeld  Method.   (Philadelphia,  P.  Reilly,  $1.25.) 

ScoTTi,  Db.  C.  :  Italian  Beader.  (Philadelphia,  P.  Reilly, 
$.60.) 

Chinese : 

Brouner,  W.  B.  :  Chinese  Made  Easy.     (Maemillan  Co.) 

Bullock,  T.  L.  :  Progressive  Exercises  in  the  Chinese  Written 
Language.     (New  York,  Stechert,  $3.75.) 

Darroch,  J.:  Chinese  Self -Taught. 

HiLLiER,  W.  C. :  The  Chinese  Language  and  JSow  to  Learn  It. 

Poster,  A.:  Elementary  Lessons  in  Chinese.  (New  York, 
Oxford  University  Press,  $12.00.) 

A  Practical  Chinese-English  Grammar  by  Dr.  Chen  of  George- 
town University,  Wash.,  D.  C.  is  to  be  published  shortly 
and  should  be  of  inestimable  value. 

The  best  dictionary  for  the  spoken  language  is*  that  by  D. 
MacGillioray :  Mandarin-Romanised  Dictionary  of  Chinese. 
(New  York,  Stechert,  $7.50.) 

Japanese : 
Aston,  W.  G.  :  Grammar  of  the  Japanese  Written  Language. 
— Grammar  of  the  Japanese  Spoken  Language. 
Chamberlain,    B.    H.  :    Handbook    of    Colloquial    Japanese. 

(Yokohama,  Kelly  &  Walsh  Co.) 
— A  Practical  Introduction  to  the  Study  of  Japanese  Writing, 

(London,  C.  Lockwood  &  Sons.) 
Hepburn,  J.   C. :   Japanese   and  English  Dictionary.      (New 

York,  Stechert,  $1.75.) 
Hosspeld:    English- J apanese    Grammar    by    A.    J.    Weintz. 

(Philadelphia,  P.  Reilly,  $1.25.) 
— Japanese  Beader,  Part  I  &  II.      (Philadelphia,  P.  Reilly, 

$1.25.) 
Imbrie:  Handbook  of  English-Japanese  Etymology. 
Lange,  R.  K.  :  Textbook  of  Colloquial  Japanese.     (New  York, 

Stechert,  $5.00,  standard  work.) 
Plaut,  H.  :  Japanese  Cormer'iation  Grammar.     (Brentano.) 
Prentys  AiTD  Sasamoto  :  Japanese  for  Daily  Use. 
Satow    &    Wasakata:    English-Japanese   Dictionary    of    the 

Spoken  Lomguage. 


204       FOREIGN  TRADE  MARKETS  AND  METHODS 

Shand,  W.  S.  :  Japanese  Self-Taught.     (New  York,  Stechert, 

$.75.) 
Sheba,  S.  :  Practical  English-Japanese  and  Japanese-English 

Conversations. 

Russian: 
Alexandropf,    a.:    Complete    Russian    English    Dictionary. 

(Obtainable  from  Stechert,  N.  Y.,  $14.00.    Best  Dictionary.) 
— A  Practical  Method  of  the  Russian  Language. 
Baedeker,  K.  :  Manual  of  the  Russian  Language  with  vocabu- 
lary and  list  of  phrases.     (Scribner's  Sons,  $.45.) 
Bondar  :  Simplified  Russian  Method. 

Chevob-Maurice  :  English-Russian  Commercial  Correspondence. 
Forbes,   Neville:   Russian   Grammar.      (New   York,    Oxford 

University  Press,  $2.00.) 
Freese,  J.  H. :  A  Russian  Manual.     (E.  P.  Dutton  &  Co., 

$1.25.) 
Harper,    S.    N.  :    Russian   Reader.      (University    of    Chicago 

Press.) 
Hill  :  Vest  Pocket  English-Russian  Dictionary.     (Philadelphia, 

D.  McKay.) 
Hosspeld:  New  Practical  Method  for  Learning  the  Russian 

Language  by  Rappoport.     (Philadelphia,  Reilly,  $1.00.) 
Karrachy-Smith  :  Lessons  in  Russian. 

Mangus,  L.  a.  :  Concise  Grammar  of  the  Russian  Language. 
MOTTi^    Pietro:    Russian    Conversation,    Grammar   and   Key. 

(London,  D.  Nutt.) 
RiOLA,  H.  :  Graduated  Russian  Reader.     (E.  P.  Dutton  &  Co., 

$1.75.) 
—How  to  Learn  Russian.     (E.  P.  Dutton  &  Co.,  $2.00.) 
Sieff:  Manual  of  Rtissian  Commercial  Correspondence.     (E. 

P.  Dutton  &  Co.) 
SOLOMONOPF,  J. :  Russian  Composition,  Parts  I,  II,  III. 
Wassiliefp,  a.:  Russian  Dictionary.     (Chas.  Seribner's  Sons.) 
— Russian  Made  Easy.     (I.  Pitman  &  Sons,  $1.00.) 
— What  You  Want  to  Say  and  Row  to  Say  It  in  Russian. 

(New  York,  W.  J.  Herman.) 


CHAPTER  XII 

DEFINITIONS  OF  FOREIGN  TRADE  TERMS 

He  shall  be  as  a  god  to  me  who  can  rightly  divide  and  de- 
fine.— Plato. 

The  work  of  the  National  Foreign  Trade  Council,  which 
held  its  seventh  convention,  May  12th  to  15th,  1920,  in  San 
Francisco,  has  accomplished  for  American  foreign  trade 
valuable  and  extensive  services  since  the  inception  of  the 
Council  in  the  early  part  of  1914. 

This  body  of  representative  American  business  men  has 
held  seven  large  conventions  in  different  parts  of  the 
United  States.  The  organization  also  has  held  to  a  con- 
tinuous advocacy  of  such  fundamental  foreign  trade  neces- 
sities as  virere  exemplified  by  the  passing  of  the  Webb  Law ; 
support  of  the  idea  of  the  American  Merchant  Marine;  a 
bargaining  tariff  sufficiently  flexible  to  prevent  any  dis- 
crimination against  American  goods;  and  expending  con- 
stant effort  to  promote  better  trade  communication  facilities 
and  removing  barriers  obstructing  our  trade  and  rendering 
competition  difficult  with  other  nations.  For  the  champion- 
ship of  these  and  other  prime  issues,  the  Foreign  Trade 
Council  has  become  a  most  valuable  institution  in  our  com- 
mercial life. 

Among  the  most  important  services  rendered  to  American 
foreign  business  by  this  Council  is  its  explicit  findings  in 
regard  to  standard  definitions  and  practices  recommended 
to  merchants,  shippers  and  exporters  doing  business  with 
other  nations.  There  have  been  so  many  variations  and 
such  a  lamentable  lack  of  knowledge  on  the  part  of  many 
new  shippers  concerning  the  exact  method  and  means  of 

205 


206       FOREIGN  TRADE  MARKETS  AND  METHODS 

marketing  American  goods  abroad  that  some  authoritative 
standard  of  procedure  was  greatly  needed.  We  believe  that 
this  pronouncement  of  the  National  Foreign  Trade  Council 
should  be  studied  with  the  utmost  care  by  every  Ameri- 
can manufacturer  or  merchant  who  expects  to  succeed  in 
his  business  abroad. 

Just  what  obligations  familiar  terms,  such  as  ''F.O.B.," 
"C.I.F.,"  etc.,  impose  upon  seller,  buyer,  shipowner, 
banker  and  all  others  affected  by  the  transaction  is  set 
forth  in  a  report  issued  by  the  Council  on  behalf  of  the 
leading  commercial  organizations  of  the  United  States. 

Half  the  troubles  in  foreign  trade  arise  from  misinter- 
pretation of  such  terms.  Even  old  merchants  will  do  well 
to  read  and  study  the  following  injunctions  and  standard 
explanations  which  have  been  agreed  upon  by  the  members 
of  the  National  Foreign  Trade  Council. 

One  of  the  subjects  which  has  given  tYie  foreign  merchant 
cause  for  complaint  has  been  the  methods  which  the  newer 
exporters  in  the  United  States  have  employed  in  making 
price  quotations  to  foreigners.  The  dissatisfaction  of 
foreign  purchasers  reached  a  head  in  the  summer  of  1919, 
in  the  form  of  organized  protests  from  Australian  importers 
over  the  meaning  given  to  the  terms  "F.O.B.  New  York" 
by  American  exporters.  The  National  Foreign  Trade 
Council  took  up  the  matter,  decided  that  in  the  best  Ameri- 
can practice  '^F.O.B.  New  York"  means  free  on  board 
overseas  vessel  at  New  York,  and  notified  its  numerous  cor- 
respondents of  this  fact  and  of  the  recommendation  of  the 
council  that  the  term  *'F.O.B.  vessel  New  York"  be  sub- 
mitted in  all  cases  for  the  term  "F.O.B.  New  York." 

So  much  interest  was  aroused  by  this  communication, 
and  so  many  other  questions  of  a  similar  nature  arose,  that 
it  was  decided  to  hold  a  conference  of  the  nine  great 
foreign  trade  organizations  of  the  country,  in  order  to 
agree  on  the  obligations  of  buyer  and  seller,  under  the 
export  quotations  in  most  common  use.  Such  a  conference 
was  held  in  India  House,  New  York,  under  the  auspices 
of  the  National  Foreign  Trade  Council,  on  December  16, 


DEFINITIONS  OP  FOREIGN  TRADE  TERMS        207 

1919.  The  organizations  participating  in  the  conference 
were  the  National  Foreign  Trade  Council,  Chamber  of 
Commerce  of  U.  S.  A.,  National  Association  of  Manufac- 
turers, American  Manufacturers  Export  Association,  Phila- 
delphia Commercial  Museum,  American  Exporters  and 
Importers  Association,  Chamber  of  Commerce  of  the  State 
of  New  York,  New  York  Produce  Exchange,  New  York 
IMerchants  Association.  The  meeting  discussed  at  length 
all  phases  of  American  export  practice,  and  issued  a  state- 
ment of  definitions  and  recommendations  agreed  upon. 

As  the  most  certain  means  of  insuring  unmistakable 
clarity  in  terms  and  conditions  of  sale,  the  conference 
voted  to  recommend  to  manufacturers  and  exporters  that 
all  use  of  abbreviated  forms  of  export  price  quotations  be 
abandoned,  and  that  such  terms  be  written  out  in  full. 

The  Conference  recognized,  however,  that  this  recom- 
mendation is  not  likely  to  be  accepted  generally  at  once; 
and,  therefore,  in  the  hope  of  effecting  a  simplification  and 
standardization  of  American  practice,  it  adopted  the  follow- 
ing statement  of  definitions  of  the  abbreviated  forms  in 
more  common  and  general  use  in  the  export  trade.  The 
Conference  strongly  recommends  to  manufacturers  and 
exporters  that  wherever  abbreviated  forms  of  export  quota- 
tions are  employed,  the  forms  herein  defined  be  used,  as  far 
as  possible,  to  the  exclusion  of  other  forms. 

These  are,  in  their  order,  the  normal  situations  on  which 
an  export  manufacturer  or  shipper  may  desire  to  quote 
prices.  It  is  understood  that  unless  a  particular  railroad 
is  specified,  the  property  will  be  delivered  to  the  carrier 
most  conveniently  located  to  the  shipper.  If  the  buyer, 
for  the  purpose  of  delivery,  or  in  order  to  obtain  lower 
transportation  charges,  desires  that  the  goods  be  delivered 
to  a  carrier  further  removed  from  the  shipper  and  entail- 
ing a  greater  cost  than  delivery  to  the  carrier  most  favor- 
ably situated,  the  carrier  to  which  the  buyer  desires  delivery 
of  the  goods  should  be  named  in  the  quotation.  The  term 
"cars  or  lighters,"  as  used  herein,  is  intended  to  include 
river,  lake  or  coastwise  ships,  canal  boats,  barges,  or  other 


208        FOREIGN  TRADE  MARKETS  AND  METHODS 

means  of  transportation,  when  so  specified  in  the  quota- 
tion. 

I.  When  the  price  quoted  applies  only  at  inland  shipping 
points  and  the  seller  merely  undertakes  to  load  the  goods 
on  or  in  cars  or  lighters  furnished  hy  the  railroad  com- 
pany serving  the  industry,  or  most  conveniently  located 
to  the  industry,  without  other  designation  as  to  routing, 
the  proper  term  is : 

F.O.B.  (named  point). 
Under  this  quotation: 

A.  Seller  must 

1.  Place  goods  on  or  in  ears  or  lighters. 

2.  Secure  railroad  bill  of  lading. 

3.  Be  responsible  for  loss  aud/or  damage  until  goods  have 
been  placed  in  or  on  cars  or  lighters  at  forwarding 
point,  and  clean  bill  of  lading  has  been  furnished  by 
the  railroad  company. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  incurred  there- 

after. 

2.  Pay  all  transportation  charges  including  taxes,  if  any. 

3.  Handle  all  subsequent  movement  of  the  goods. 

II.  When  the  seller  quotes  a  price  including  transpor- 
tation charges  to  the  port  of  exportation  without  assuming 
responsibility  for  the  goods  after  obtaining  a  clean  bill  of 
lading  at  point  of  origin,  the  proper  term  is: 

F.O.B.  (named  point)  Freight  Prepaid  to  (named  point  on 
the  seaboard). 

Under  this  quotation: 
A.  Seller  must 

1.  Place  goods  on  or  in  ears  or  lighters. 

2.  Secure  railroad  bill  of  lading. 

3.  Pay  freight  to  named  port. 

4.  Be  responsible  for  loss  and/or  damage  until  goods  have 
been  placed  in  or  on  ears  or  lighters  at  forwarding 
point,  and  clean  bill  of  lading  has  been  furnished  by 
the  railroad  company. 


DEFINITIONS  OF  FOREIGN  TRADE  TERMS        209 

B.  Bnyer  must 

1.  Be  responsible  for  loss  and/or  damage  incurred  there- 
after. 

2.  Handle  all  subsequent  movements  of  the  goods. 

3.  Unload  goods  from  cars. 

4.  Transport  goods  to  vessels. 

5.  Pay  all  demurrage  and/or  storage  charges. 

6.  Arrange  for  storage  in  warehouse  or  on  wharf  where 
necessary. 

III.  Where  the  seller  wishes  to  quote  a  price,  from  which 
the  buyer  may  deduct  the  cost  of  transportation  to  a  given 
point  on  the  seaboard,  without  the  seller's  assuming 
responsibility  for  the  goods  after  obtaining  a  clean  bill  of 
lading  at  point  of  origin,  the  proper  term  is : 

F.O.B.  (named  point)  Freight  Prepaid  to  (named  point  on 
the  seaboard). 

Under  this  quotation: 

A.  Seller  must 

1.  Place  goods  on  or  in  cars  or  lighters. 

2.  Secure  railroad  bill  of  lading. 

3.  Be  responsible  for  loss  and/or  damage  until  goods 
have  been  placed  in  or  on  cars  or  lighters  at  forwarding 
point,  and  cle^n  bill  of  lading  has  been  furnished  by 
the  railroad  company. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  incurred  there- 
after. 

2.  Pay  all  transportation  charges  (buyer  is  then  entitled 
to  deduct  from  the  amount  of  the  invoice  the  freight 
paid  from  primary'  point  to  named  port). 

3.  Handle  all  subsequent  movement  of  the  goods. 

4.  Unload  goods  from  cars. 

5.  Transport  goods  to  vessel. 

6.  Pay  all  demurrage  and/or  storage  charges. 

7.  Arrange  for  storage  in  warehouse  or  on  wharf  where 
necessary. 

IV.  The  seller  may  desire  to  quote  a  price  covering  the 
transportation  of  the  goods  to  seaboard,  assuming  respon- 


210       FOREIGN  TRADE  MARKETS  AND  METHODS 

sibility  for  loss  and/or  damage  up  to  that  point.    In  this 
case,  the  proper  term  is : 

F.O.B.  ears  (named  point  on  seaboard). 
Under  this  quotation: 

A.  Seller  must 

1.  Place  goods  on  or  in  cars. 

2.  Secure  railroad  bill  of  lading. 

3.  Pay  all  freight  charges  from  forwarding  point  to  port 
on  seaboard. 

4.  Be   responsible   for   loss    and/or   damage   until    goods 
have  aiTived  in  or  on  cars  at  the  named  port. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  incurred  there- 
after. 

2.  Unload  goods  from  cars. 

3.  Handle  all  subsequent  movement  of  the  goods. 

4.  Transport  goods  to  vessel. 

5.  Pay  all  demurrage  and/or  storage  charges. 

6.  AiTange  for  storage  in  warehouse  or  on  wharf  where 
necessary. 

V.  It  may  be  that  the  goods,  on  which  a  price  is  quoted 
covering  the  transportation  of  the  goods  to  the  seaboard, 
constitute  less  than  a  carload  lot.  In  this  case,  the  proper 
term  is: 

F.O.B.  cars  (named  port)  L.C.L. 
Under  this  quotation: 

A.  Seller  must 

1.  Deliver  goods  to  the  initial  carrier. 

2.  Secure  railroad  bill  of  lading. 

3.  Pay  all  freight  charges  from  forwarding  point  to  port 
on  seaboard. 

4.  Be  responsible  for  loss  and/or  damage  until  goods  have 
arrived  on  cars  at  the  named  port. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  incurred  there- 
after. 

2.  Handle  all  subsequent  movement  of  the  goods. 

3.  Accept  goods  from  the  carrier. 


DEFINITIONS  OF  FOREIGN  TRADE  TERMS        211 

4.  Transport  goods  to  vessel. 

5.  Pay  all  storage  charges. 

6.  Arrange  for  storage  in  warehouse  or  on  wharf  where 
necessary. 

VI.  Seller  may  quote  a  price  which  will  include  the 
expense  of  transportation  of  the  goods  by  rail  to  the  sea- 
board, including  lighterage.  In  this  case,  the  proper  term 
is: 

F.G.B.  cars  (named  port)  Lighterage  Free. 
Under  this  quotation: 

A.  Seller  must 

1.  Place  goods  on  or  in  cars. 

2.  Secure  railroad  bill  of  lading. 

3.  Pay  all  transportation  charges  to,  including  lighterage 
at,  the  port  named. 

4.  Be  responsible  for  loss  and/or  damage  until  goods  have 
arrived  on  cars  at  the  named  port. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  incurred  there- 
after. 

2.  Handle  all  subsequent  movement  of  the  goods. 

3.  Take  out  the  insurance  necessary  to  the  safety  of  the 
goods  after  arrival  on  the  cars. 

4.  Pay  the  cost  of  hoisting  goods  into  vessel  where  weight 
of  goods  is  too  great  for  ship's  tackle. 

5.  Pay  all  demurrage  and  other  charges,  except  lighterage 
charges. 

VII.  The  seller  may  desire  to  quote  a  price  covering 
delivery  of  the  goods  alongside  overseas  vessel  and  within 
reach  of  its  loading  tackle.  In  this  case,  the  proper  term 
is: 

F.A.S.  vessel   (named  port). 
Under  this  quotation: 
A.  Seller  must 

1.  Transport  goods  to  seaboard. 

2.  Store  goods  in  warehouse  or  on  wharf,  if  necessary, 
unless  buyer's  obligation  includes  provision  of  shipping 
facilities. 


212       FOREIGN  TRADE  MARIvETS  AND  METHODS 

3.  Place  goods  alongside  ressel  either  in  a  lighter  or  oo 
the  wharf. 

4.  Provide  the  usual  dock  or  ship's  receipt. 

5.  Be  responsible  for  loss  and/or  damage  until  goods  have 
been  delivered  alongside  the  ship  or  on  wharf. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  thereafter,  and 
for  insurance, 

2.  Handle  all  subsequent  movement  of  the  goods. 

3.  Pay  cost  of  hoisting  goods  into  vessel  where  weight  of 
goods  is  too  great  for  ship's  tackle. 

VIII.  The  seller  may  desire  to  quote  a  price  covering  all 
expenses  up  to  and  including  delivery  of  the  goods  upon 
the  overseas  vessel  at  a  named  port.  In  this  case,  the 
proper  term  is: 

F.O.B.  vessel  (named  port). 
Under  this  quotation: 

A.  Seller  must 

1.  Meet  all  charges  incurred  in  placing  goods  actually  on 
board  the  vessel. 

2.  Provide  the  usual  dock  or  ship's  receipt. 

3.  Be  responsible  for  all  loss  and/or  damage  until  goods 
have  been  placed  on  board  the  vessel. 

B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  thereafter. 

2.  Handle  all  subsequent  movement  of  the  goods. 

IX.  The  seller  may  be  ready  to  go  farther  than  the 
delivery  of  his  goods  upon  the  overseas  vessel  and  be  will- 
ing to  pay  transportation  to  a  foreign  point  of  delivery. 
In  this  case,  the  proper  term  is : 

C.  &  F.  (named  foreign  port). 
Under  this  quotation: 
A.  Seller  must 

1.  Make  freight  contract  and  pay  transportation  charges 
sufficient  to  carry  goods  to  agreed  destination. 

2,  Deliver  to  buyer  or  his  agent  clean  bills  of  lading  to 
the  agreed  destination. 


DEFINITIONS  OF  FOREIGN  TRADE  TERMS        213 

3.  Be  responsible  for  loss  and/or  damage  until  goods  have 
been  delivered  alongside  the  ship  and  clean  ocean  bill 
of  lading  obtained  (seller  is  not  responsible  for  delivery 
of  goods  at  destination). 
B.  Buyer  must 

1.  Be  responsible  for  loss  and/or  damage  thereafter  and 
must  take  out  all  necessary  insurance. 

2.  Handle  all  subsequent  movement  of  the  goods. 

3.  Take  delivery  and  pay  costs  of  discharge,  lighterage 
and  landing  at  foreign  port  of  destination  in  accordance 
with  bill  of  lading  clauses. 

4.  Pay  foreign  customs  duties  and  wharfage  charges,  if 
any. 

X.  The  seller  may  desire  to  quote  a  price  covering  the 
cost  of  the  goods,  the  marine  insurance  on  the  goods,  and 
all  transportation  charges  to  the  foreign  point  of  delivery. 
In  this,  the  proper  term  is: 

C.I.F.   (named  foreign  port). 
Under  this  quotation: 

A.  Seller  must 

1.  Make  freight  contract  and  pay  freight  charges  suflH- 
cient  to  carry  goods  to  agreed  destination. 

2.  Take  out  and  pay  for  necessary  marine  insurance. 

3.  Deliver  to  buyer  or  his  agent  clean  bills  of  lading  to 
the  agreed  destination,  and  insurance  policy  and/or 
negotiable  insurance  certificate. 

4.  Be  responsible  for  loss  and/or  damage  until  goods 
have  been  delivered  alongside  the  ship,  and  clean  ocean 
bill  of  lading  and  insurance  policy  and/or  negotiable 
insurance  certificate  have  been  delivered  to  the  buyer, 
or  his  agent.  (Seller  is"  not  responsible  for  the  deliveiy 
of  goods  at  destination,  nor  for  payment  by  the  under- 
writers of  insurance  claims.) 

5.  Provide  war  risk  insurance,  where  necessary,  for  buyers' 
account. 

B.  Buyer  must 

1,  Be  responsible  for  loss  and/or  damage  thereafter,  and 
must  take  all  claims  to  which  he  may  be  entitled  under 
the  insurance  directly  on  the  underwriters. 


214       FOREIGN  TRADE  MARKETS  AND  METHODS 

2.  Take  delivery  and  pay  costs  of  discharge,  lighterage 
and  landing  at  foreign  port  of  destination  in  accord- 
ance with  bill  of  lading  clauses. 

3.  Pay  foreign  customs  duties  and  wharfage  charges,  if 
any. 

Explanations  of  Abbreviations 

F.O.B , Free  on  board 

F.A.S Free  alongside 

C.  & F .Cost  and  freight 

C.I.F Cost,  insurance  and  freight 

L.C.L Less  than  carload  lot 

In  reaching  the  conclusions  set  forth  in  this  statement 
the  Conference  considered  the  fact  that  there  are,  in  more 
or  less  common  use  by  manufacturers  in  different  parts 
of  the  United  States,  numerous  variations  of  these  abbrevia- 
tions practically  all  of  which  are  employed  to  convey  mean- 
ings substantially  synonymous  with  those  here  defined.  For 
instance,  there  are  manufacturers  who  quote  "F.O.B. 
Cars,"  "F.O.B.  Works,"  "F.O.B.  Mill,"  or  "F.O.B.  Fac- 
tory," meaning  that  the  seller  and  buyer  have  the  same 
responsibilities  as  those  set  forth  in  section  1.  The  Confer- 
ence considered  all  those  variations  and  determined  to 
recommend  the  use  of  "F.O.B.  (named  point),"  as  "F.O.B. 
Detroit,"  "F.O.B.  Pittsburgh,"  etc.  Of  the  considerable 
number  of  these  abbreviations  which  are  used  in  the  United 
States,  the  Conference  felt  that  the  form  "F.O.B.  named 
point)"  is  most  widely  used  and  understood,  and  there- 
fore, should  be  adopted  as  the  standard  of  practice. 

The  chief  purpose  of  the  Conference  is  to  simplify  and 
standardize  American  practice,  and  to  that  end  it  urges 
manufacturers  and  exporters  to  cease  the  use  of  synony- 
mous abbreviations  and  quote  habitually  in  the  terms  here 
recommended,  just  as  far  as  these  terms  will  cover  the 
price  conditions  which  it  is  desired  to  arrange  with  the 
buyer. 

Variations  of  the  abbreviations  recommended  in  other 
sections  also  are  in  more  or  less  common  use  throughout 


DEFINITIONS  OF  FOREIGN  TRADE  TERMS        215 

the  United  States.  The  recommendations  of  the  Conference 
set  forth  above  apply  to  them  with  the  same  force  as  to 
those  cited  under  section  I. 

Manufacturers  and  exporters  are  urged  to  bear  in  mind 
that  the  confusion  and  controversies  which  have  arisen 
have  sprung  in  part  from  the  use  of  an  excessive  number 
of  abbreviated  forms  with  substantially  similar  meanings, 
as  well  as  from  the  use  of  abbreviations  in  a  sense  different 
from  their  original  meanings,  or  in  an  application  not 
originally  given  them  and  different  from  the  sense  or 
application  understood  by  foreign  buyers. 

In  simplified  and  standardized  practice  lies  the  best  hope 
of  reducing  confusion  and  avoiding  controversy. 

The  Conference  urges  upon  manufacturers  and  exporters 
the  ver5^  great  importance  at  all  times  of  making  their 
intention  in  whatever  quotations  they  employ  so  thoroughly 
clear  as  to  be  impossible  of  misunderstanding  or  misinter- 
pretation. It  is  much  better  to  take  the  time  and  space  at 
the  outset  to  make  the  quotation  clearly  understood,  than 
to  be  compelled  in  the  end  to  go  through  vexatious  con- 
troversy or  litigation,  which  costs  not  only  time  and  expense 
but  customers  as  well.  Misunderstandings  can  best  be 
avoided  if  the  seller  will  formulate  a  written  statement  of 
the  general  conditions  under  which  his  sales  are  to  be  made, 
and  will  see  that  the  foreign  buyer  possesses  these  terms 
of  sale  when  considering  a  quotation.  The  items  which 
may  be  included  in  such  a  statement,  deal  with:  delivery, 
delays,  partial  shipments,  shipping  instructions,  inspection, 
claims,  damage,  and  payment.  If  all  contingencies  are 
thus  covered  by  carefully  considered  conditions  of  sale, 
disputes  will  largely  be  prevented. 

The  quotation  ''F.O.B.  (named  port)"  as  "F.O.B.  New 
York,"  "F.O.B.  New  Orleans,"  "F.O.B.  San  Francisco," 
is  often  used  by  inland  producers  and  distributors  to  mean 
merely  delivery  of  the  goods  at  railway  terminal  at  the 
port  named.  This  abbreviation  originated  as  an  export 
quotation  and  had  no  application  to  inland  shipments.  It 
was  used  only  to  mean  delivery  of  the  goods  upon  an  over- 


216       FOREIGN  TRADE  MARKETS  AND  METHODS 

seas  vessel  at  the  port  named.  That,  in  fact,  is  the  mean- 
ing universally  given  to  the  phrase  among  foreigners,  and 
is  the  meaning  which  the  best  practice  among  exporters 
requires  it  invariably  to  have.  But  because  of  the  con- 
fusion which  lias  arisen  through  the  use  of  that  form  with 
a  different  meaning  by  inland  producers  and  distributors, 
and  in  the  interest  of  unmistakable  clarity,  the  Conference 
most  strongly  urges  the  invariable  use  by  American  manu- 
facturers and  exporters  of  the  form  "F.O.B.  vessel  (named 
port)."  This  adds  only  one  word  to  the  abbreviated  form 
and  has  the  great  advantage  that  it  cannot  be  misunder- 
stood. It  also  avoids  the  difficulty  which  might  arise  among 
foreigners  not  always  well  versed  in  American  geography, 
through  confusing  an  inland  forwarding  point  with  a 
shipping  port  at  seaboard. 

The  Conference  calls  attention  to  the  fact  that  in  sell- 
ing "F.A.S.  vessel"  manufacturers  and  exporters  should 
be  careful  to  have  their  agreements  with  buyers  cover 
explicitly  the  question  of  responsibility  for  loss  after  goods 
have  been  delivered  on  the  wharf  or  alongside  the  vessel 
and  before  they  are  actually  loaded  on  the  ship.  There  is 
no  generally  established  practice  on  this  point.  The  recom- 
mendation of  the  Conference  in  the  definitions  of  respon- 
sibility under  section  VII,  sets  up  a  rule  which  it  is  hoped 
will  lead  to  the  establishment  of  a  standard  practice. 

It  is  understood  that  the  provision  of  lighterage  covered 
in  several  of  these  recommendations  is  only  within  the 
usual  free  lighterage  limits  of  the  port,  and  that  where 
lighterage  outside  such  limits  is  required,  it  is  for  buyer's 
account. 

In  order  to  avoid  confusion  in  another  particular,  atten- 
tion is  called  to  the  care  which  must  be  exercised  in  all 
cases  in  making  weight  quotations.  The  net  ton,  the  gross 
ton  and  the  metric  ton  all  differ  in  weight.  Similarly 
there  is  a  variation  in  the  use  of  the  term  "hundred- 
weight" to  mean  either  100  pounds  or  112  pounds.  It  is, 
therefore,  not  sufficient  to  quote  a  price  per  *'ton"  or  per 
"hundredweight."     Instead  the   Conference   recommends 


DEFINITIONS  OF  FOREIGN  TRADE  TERMS        217 

the  use  of  the  terms  ''ton  of  2000  lbs,"  "ton  of  2240  lbs.,'* 
or  "ton  of  2204  lbs.,"  etc.,  whichever  is  intended. 

It  is  also  important  to  note  that  a  carload  lot  in  the 
United  States  means  the  quantity  of  the  particular  com- 
modity in  question  necessary  to  obtain  the  carload  freight 
rate  for  transportation  on  American  railways.  This  quan- 
tity varies  according  to  the  commodity  and  also  varies  in 
different  parts  of  the  country.  Certain  commodities  being 
more  bulky  than  others,  the  minimum  carload  for  them  is 
less  than  for  heavier  products  occupying  less  space.  The 
load  required  may  range  anywhere  from  12,000  to  90,000 
pounds.  Consequently,  it  is  important,  when  quoting  prices 
applicable  to  carload  lots,  to  state  and  to  specify  the  mini- 
mum weight  necessary  to  make  a  carload  lot  of  the  par- 
ticular commodity  for  the  particular  shipment  in  ques- 
tion. 

The  Conference  points  out  that  in  quoting  "  C.  &  F. " 
or  "CI.F.,"  manufacturers  and  exporters  moving  large 
quantities  of  material  by  one  vessel  should  be  careful  to 
ascertain  in  advance  the  buyer's  capacity  to  take  delivery. 
This  because,  under  these  terms  and  as  a  condition  of  mak- 
ing the  freight  rate,  transportation  companies  may  require 
a  certain  rate  of  discharge  per  day,  and  that  rate  of  dis- 
charge might  be  in  excess  of  the  buyer's  capacity  to  take 
delivery.  In  such  event  an  adjustment  with  the  trans- 
portation company  would  be  necessary,  which  might  affect 
the  freight  rate  and  consequently  the  price  to  be  quoted. 

The  Conference  also  strongly  urges  shippers  clearly  to 
understand  the  provisions  of  their  insurance  protection  on 
all  foreign  sales,  irrespective  of  the  general  terms  used 
thereon.  In  almost  all  cases  it  should  be  possible,  when 
making  shipments  by  steamer,  to  obtain  insurance  cover 
giving  full  protection  from  primary  shipping  point  to 
designated  sea  port  delivery,  and/or  foreign  port  delivery. 
As  ordinary  marine  insurance  under  F.P.A.  conditions, 
that  is,  free  of  particular  average,  gives  no  protection 
against  deterioration  and/or  damage  to  the  merchandise 
itself  while  in  transit,  when  caused  by    the    recognized 


218       FOREIGN  TRADE  MARKETS  AND  METHODS 

hazards  attending  such  risks,  shippers  should  endeavor  in 
all  cases  to  obtain  insurance  under  W.P.A.  (S.P.A.)  con- 
ditions, that  is,  with  particular  average  (subject  to  par- 
ticular average),  when  in  excess  of  the  customary  fran- 
chise of  3  per  cent  to  5  per  cent.  Under  such  form  of 
insurance,  underwriters  will  be  called  upon  to  pay  claims 
for  damages  when  these  exceed  the  stipulated  franchise. 

The  Conference  points  out  that  in  as  much  as  fees  for 
consular  invoices  and  similar  items  are  arbitrary  charges 
fixed  by  foreign  governments,  they  are  not  included  in  the 
terms  of  C.  &  F.  or  C.I.F.  quotations,  and  it  is  part  of  the 
duty  of  the  buyer  to  meet  them. 

Finally,  the  Conference  strongly  recommends,  as  a  most 
effective  measure  of  simplification,  the  general  practice  of 
quoting  for  export,  as  far  as  possible,  either  "F.A.S.  ves- 
sel," or  "F.O.B.  vessel,"  or  "C.I.F."  Concentration  on 
this  small  list,  all  of  which  terms  are  readily  understood 
abroad  and  are  difficult  of  misinterpretation,  will,  it  is  felt, 
be  markedly  influential  in  avoiding  confusion  and  con- 
troversy. 

The  conclusions  and  definitions  set  forth  above  are  the 
recommendations  of  a  Conference  which  was  composed  of 
representatives  of  nine  of  the  great  commercial  organiza- 
tions of  the  United  States  interested  in  foreign  trade.  Not 
all  have  as  yet  the  force  of  law  or  long  established  practice ; 
but  it  is  the  hope  and  expectation  of  the  Conference  that 
these  recommendations  will  receive  such  adherence  on  the 
part  of  American  producers  and  distributors,  as  to  make 
them  in  fact  the  standard  American  practice.  And  it  is, 
therefore,  expected  that  in  due  time  they  will  receive  the 
sanction  of  legal  authority. 


CHAPTER  XIII 
THE  HOUSE  ORGAN  IN  FOREIGN  TRADE 

Although  the  establishment  of  magazines  by  both  do- 
mestic and  also  foreign  trade  firms  for  the  purpose  of 
benefiting  their  employees,  as  well  as  for  business  propa- 
ganda generally,  has  reached  an  extensive  stage,  the  entire 
movement  has  need  of  serious  study  not  only  by  the 
editors  of  these  papers,  but  also  by  business  houses  them- 
selves. As  a  matter  of  fact,  a  large  number  of  firms  where 
these  magazines  have  been  started  and  are  still  being 
carried  on  have  not  taken  the  magazine  seriously  as  a 
vital  and  necessary  part  of  the  firm's  activity.  It  has 
been  only  comparatively  recently,  since  the  vital  subject 
of  business  personnel  has  been  brought  forcibly  to  the 
front  through  extensive  labor  and  wage  troubles,  that  large 
business  houses  have  come  to  appreciate  afresh  the  far- 
reaching  value  of  some  printed  medium  through  which  the 
expression  of  opinion  and  cooperative  sentiment  may  be 
presented. 

It  is  found  upon  investigation  that  many  house  organs 
have  failed  after  running  through  a  brief  career.  For 
example,  one  firm  writes: 

At  one  time  we  did  publish  a  mimeographed  magazine  called 
In  The  Family,  but  this  died  a  natural  death  about  a  year  after 
birth. 

It  has  been  suggested  by  one  editor  of  such  a  short-lived 
publication  that  the  following  old  couplet  would  be  an 
appropriate  epitaph  for  many  short-lived  house  organs : 

If  so  soon  I  was  done  for, 
What  the  hell  was  I  begun  for? 

219 


220        FOREIGN  TRADE  MARJKETS  AND  METHODS 

There  is  a  certain  type  of  business  ma,n  who  has  found 
it  difficult  to  appreciate  that  anything,  either  in  the  adver- 
tising or  propaganda  line,  which,  according  to  his  estimates 
of  dollars  and  cents  is  nonproducing,  is  worthy  of  serious 
thought  or  cooperation  of  the  firm.  As  one  employer  said, 
"charge  it  to  overhead  expense  and  forget  it."  That  is 
not  the  way  in  which  this  kind  of  publication  can  be  made 
successful.  One  of  the  first  principles  of  success  in  the 
publication  of  a  house  organ  is  obtaining  the  enthusiastic 
and  intelligent  cooperation  of  the  heads  or  directors  of 
the  firm.  Without  this  the  editorial  staff  will  lead  a  waver- 
ing and  staggering  existence,  until  the  project  falls. 

Another  point  of  vital  moment  resides  in  relation  to  the 
policy  of  the  magazine.  Too  often  this  is  conspicuous  by 
its  absence.  A  first  review  of  many  house  organs  leads 
to  the  belief  that  like  Topsy  they  have  "just  growed." 
Too  many  of  these  have  been  edited  by  the  use  of  odds 
and  ends  of  time  of  some  busy,  overworked  manager,  com- 
ing out  like  the  Subway  Sun,  "now  and  then."  We  quote 
from  one  house: 

The  "House  Organ"  is  gotten  together  in  spare  time.  The 
writer  is  responsible  for  editing  it,  but  has  so  many  other  things 
to  do  that  the  "House  Organ"  is  becoming  a  sort  of  side  issue. 

There  has  been  little  or  no  plan  for  subsequent  issues, 
covering  for  example  a  year  of  propaganda,  and  attention 
to  arrangement  of  material  has  been  lacking,  as  well  as 
any  logical  sequence,  or  journalistic  form,  or  order.  Many 
of  our  house  organs  are  like  certain  South  American  news- 
papers.with  which  I  have  been  familiar,  which  when  receiv- 
ing telegraphic  communications  placed  them  on  the  front 
page  in  the  order  in  which  these  chanced  to  be  received. 
Quite  often  the  last  received  and  most  important  telegram 
or  cablegram  is  the  last  thing  down  in  the  corner,  simply 
because  it  happened  to  be  the  last  message  arriving. 

As  to  policy,  the  following  points  may  be  considered. 
Before  going  ahead  it  is  well  for  the  person  responsible 
for  the  magazine  to  have  clearly  in  mind  the  main  purpose. 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  221 

Given  this  there  will  be  subsidiary  aims  which  will  require 
attention.    James  Russell  Lowell  once  said : 

If  you  have  one  I'oom  in  the  house  where  all  the  family  meet, 
you  may  have  as  many  hallways  into  it  as  you  like,  but  beware 
of  a  house  that  is  all  hallways. 

In  order  to  get  a  number  of  the  objective  points  before 
us  we  quote  from  a  few  letters  received  from  the  larger 
firms  as  to  the  objective  policy  of  their  house  organs : 

The  Lamp. — The  primary  purpose  in  starting  "The  Lamp" 
was  to  provide  a  medium  of  information  for  the  company's 
employees  and  stockholders.  The  ramifications  of  our  business 
reach  into  many  distant  lands  and  call  for  the  employment  of 
every  class  of  labor  from  the  lowest  paid  to  the  highest.  Many 
of  these  men  felt  vei-y  much  out  of  touch  with  the  management, 
for  they  are  stationed  in  foreign  countries  and  in  former  times, 
received  only  such  meagre  information  as  was  contained  in  busi- 
ness letters.  The  "Lamp"  attempts  to  tie  the  organization  to- 
gether and  to  extend  the  sphere  of  influence  of  the  management 
over  many  thousand  employees  who  have  never  met,  and  prob- 
ably never  will  meet  the  men  who  guide  the  company's  des- 
tinies. 

Morse  Dial. — Creating  good  will  among  our  emploj'ees  toward 
the  company  and  secondarily  to  present  to  the  trade  some  idea 
of  the  organization  we  have ;  our  Masthead  states  that  the  publica- 
tion is  devoted  to  the  welfare  of  the  Employees'  Association  and 
to  the  interests  of  the  company.  We  seek  to  breathe  into  the 
pages  of  the  publication  the  life  and  spirit  of  the  men  and  women 
employed  here  and  in  doing  that  we  feel  that  we  are  successful 
in  promoting  the  esprit  de  corps  so  essential  to  any  organiza- 
tion. We  preach  the  value  of  a  family  spirit,  the  fellowship  of 
service  and  the  relationship  that  exists  between  the  employee  and 
the  employer  and  we  tiy  to  do  this  in  a  way  that  will  not  violate 
the  confidence  of  the  reader. 

Chemical  Bulletin. — The  object  of  our  house  organ  is  to  unite 
the  employees  of  the  bank  into  a  closer  family,  encourage  coopera- 
tion among  the  different  departments,  and  keep  up  the  morale. 
It  began  as  a  purely  intenial  organ  and  gxadually  grew  until 
now  we  have  a  mailing  list  of  1400  and  by  the  first  of  the  year 
we  hope  to  enlarge  it  to  uiclude  all  of  our  customers. 


222        FOREIGN  TRADE  MARKETS  AND  METHODS 

Stewart  Factory  News. — Our  object  in  publishing  our  house 
organ  is  to  combat  internal  dissatisfaction,  to  inspue  loyalty  to 
the  firm,  to  increase  production,  to  put  all  employees  on  an 
equal  plane  and  to  insure  cooperation  and  efficiency. 

Western  Electric  News. — Our  object  in  publishing  a  corpora- 
tion magazine  is  to  build  up  esprit  de  corps  and  to  educate  by 
entertaining,  as  well  as  to  keep  before  each  department  the 
activities  of  the  other  departments  of  the  company. 

Guaranty  News. — The  Guaranty  News  was  published  originally 
for  the  purpose  of  providing  a  medium  through  which  the  activi- 
ties of  the  Guaranty  Club  might  be  reported.  Naturally,  the 
first  editors  branched  off  from  this  primary  object  and  began 
to  'sell'  the  bank  to  its  employees  through  the  use  of  stories 
dealing  with  various  departments  or  purpose  of  bank  service. 
A  later  development  was  the  inclusion  of  articles  on  financial 
and  business  subjects,  which  it  was  thought  would  appeal  not 
only  to  the  members  of  the  Guaranty  Club,  but  to  officers  and 
members  of  the  staffs  of  other  banks,  chambers  of  commerce, 
boards  of  trade,  and  similar  organizations  among  which  copies  of 
the  'News'  were  distributed.  Latterly,  the  tendency  has  been  for 
the  'News'  to  develop  along  the  lines  upon  which  it  was  originally 
projected;  that  is,  for  some  time  we  have  been  using  mostly 
articles  dealing  with  Guaranty  Club  activities.  We  still  continue 
using  articles  covering  the  bank's  activities,  but  the  idea  now  is 
not  so  much  to  sell  the  bank  to  its  employees  as  it  is  to  express 
the  fact  that  the  bank  as  an  institution  and  its  employees  as  a 
body  and  individuals,  are  bound  together  by  the  ties  of  mutual 
dependence,  and  that  what  is  of  interest  to  one  will  be  of  interest 
to  the  other.  There  is,  of  course,  also  the  idea  of  representing 
this  bank  to  other  banks  and  business  institutions  in  its  most 
favorable  aspects.  We  do  seek  to  create  good  will  for  the 
Guaranty  Trust  Company  through  the  Guaranty  News,  but  I 
feel  that  its  purpose  is  less  to  serve  business  ends  of  any  sort 
than  it  is  to  have  a  publication  such  at  it  seems  natural  and  fitting 
for  any  large  organization  of  men  and  women  to  possess. 

Counter  Currents. — Solely  to  keep  the  organization  working 
together  and  let  one  half  know  what  the  other  half  is  doing. 
Of  course,  it  is  a  means  of  getting  messages  across  better  than 
any  other  method. 

It  seems  clear  that  for  many  hoiLse  organs  a  main  object 
consists  in  the  endeavor  to  unite  or  tie  together  the  various 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  223 

elements  of  a  large  business  organization.  Specialization 
in  departments  has  grown  so  rapidly  that  in  many  an 
American  business  house  a  man  working  in  one  depart- 
ment knows  as  little  about  what  is  going  on  in  the  depart- 
ment on  the  next  floor  as  he  knows  about  his  neighbors 
on  the  next  floor  in  a  city  apartment  house.  The  house 
organ  should  be  the  means  of  introducing  the  men  in  one 
department  to  those  in  another,  outlining  for  each  some- 
thing of  the  work,  aims  of  the  various  sections,  and  show- 
ing how,  by  the  giving  of  this  knowledge,  closer  coopera- 
tion may  be  attained.  The  house  organ  is,  therefore,  a 
uniting  bond,  a  cementing  tie,  and  by  reason  of  its  abili^ 
to  play  up  the  accomplishments  of  different  departments 
or  individuals  it  furnishes  a  medium  whereby  pride  in  the 
organization  may  be  engendered  and  esprit  de  corps  at- 
tained. 

Among  other  important  objectives  is  that  of  furnishing 
a  written  record  of  historical  events  connected  with  the 
firm;  the  furnishing  of  an  "employees'  forum"  in  which 
the  workers  may  express  their  ideas;  the  keeping  of  the 
firm's  name  before  the  trade;  the  exchange  of  opinion 
regarding  new  methods,  new  inventions  and  accomplish- 
ments; selling  the  organization  to  the  employees;  furnish- 
ing important  selling  data  for  salesmen;  "to  keep  up  a 
high  morale  among  our  employees";  present  informative 
and  educational  articles  relative  to  commercial,  economic 
and  industrial  subjects;  giving  incentive  to  employees 
toward  self -training  by  presenting  books  for  reading  in  the 
firm's  library  and  furnishing  courses  along  the  line  of  the 
work  of  the  house  for  reading  and  study. 

As  a  result  of  an  investigation  among  100  more  or  less 
well-known  house  magazines  of  large  concerns,  we  found 
that  a  large  number  of  the  editors  stated  that  personal 
items  seemed  to  be  the  most  interesting  part  of  the  maga- 
zine to  the  employees.  This,  of  course,  should  be  con- 
sidered in  the  making  up  of  an  internal  magazine,  a  maga- 
zine published  for  a  concern  having  one  large  home  office. 
It  is  not  so  true  for  those  house  magazines  which   are 


224       FOREIGN  TRADE  MARKETS  AND  METHODS 

published  at  the  home  office  on  behalf  of  hundreds  of 
thousands  of  employees  in  foreign  branches  scattered  over 
the  earth.  In  such  cases  Emilio  Tremaleda  in  Bilbao, 
Spain,  H.  Sakatani  in  Tokyo,  and  Sancho  Chopitea  in  Anto- 
fagasta  would  have  comparatively  little  interest  in  the  fact 
that  John  Jones,  salesman  of  the  home  offiee,  was  engaged 
to  Lucy  Larkins,  or  that  the  wife  of  Bill  Sykes  of  the 
trucking  department  had  given  birth  to  twins.  On  the 
other  hand,  such  personal  items  as  those  connected  with 
promotions  in  the  ranks,  new  inventions  of  labor-saving 
machinery  on  the  part  of  employees,  certain  athletic  vic- 
tories, appointments  of  new  officers,  opening  of  new  offices, 
together  with  a  list  of  arrivals  and  departures  at  the  home 
office  of  members  of  foreign  offices,  all  such  events  would 
naturally  find  their  place  in  a  comprehensive  house  maga- 
zine. 

Apropos  of  this  subject  we  quote  a  paragraph  from  a 
letter  of  Walter  G.  Miller,  editor  of  The  Guaranty  News: 

I  believe  emploj'ees  are  mostly  interested  in  the  news  items 
reporting  their  own  activities.  For  example:  If  some  depart- 
ment or  division  has  a  dance  or  party  or  picnic,  each  member 
of  that  department  or  division,  of  course,  likes  to  read  about  it 
afterwards,  and  I  think  other  departments  and  divisions  are 
interested  in  reading  about  such  events  also.  I  think  we  are  all 
interested  in  what  the  other  man  or  woman  is  doing  rather  than 
in  what  an  impersonal  corporation  is  doing.  I  believe  there  is 
more  interest  in  the  news  that  John  Jones  has  been  appointed 
Assistant  Manager  of  his  department  than  there  is  in  the  fact 
that  a  new  office  has  been  opened  in  Kalamazoo.  I  believe  it  is 
the  personal  human  touch  in  a  house  organ  that  makes  it  interest- 
ing. 

It  is  difficult  to  lay  down  fixed  rules  regarding  what 
should  or  should  not  be  published  concerning  personalia 
in  the  magazine.  The  first  requirement  is  a  certain  amount 
of  common  sense  and  taste  on  the  part  of  the  editor.  If 
this  is  absent  all  of  the  fourteen  points  of  a  League  of 
House  Organs  will  not  solve  the  problem  satisfactorily. 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  225 

This  leads  to  the  point  of  quality  in  a  house  organ. 

In  my  judgment  if  the  editing  of  a  house  magazine  is 
worth  while  doing  at  all,  it  is  worth  while  doing  well; 
that  is,  with  a  sense  of  quality  and  distinction  which  will 
bring  credit  rather  than  discredit  upon  the  house.  It  ia 
perhaps  the  only  regular  message  to  the  trade  and  the 
world,  furnishing  a  revelation  of  the  firm's  ideas  and 
ideals  and  its  standards  and  methods.  It  should  not  only 
give  tangibility  to  the  firm's  purposes,  but  it  should  do  it 
in  such  a  way  as  to  lift  rather  than  detract  from  the 
reputation  of  the  house.  This  magazine  may  be  the  only 
indication  certain  prospective  clients  wiU  see  regarding  the 
firm. 

It  may  be  well  to  remember  that  the  judgment  shown  in 
the  choice  of  jokes,  the  placing  of  a  photograph,  and  the 
general  make-up  and  appearance  of  a  magazine,  though 
seemingly  small  matters  of  detail  in  themselves,  are  fre- 
quently determining  factors  in  the  minds  of  readers  as  to 
the  kind  of  business  firm  represented  by  the  house 
organ. 

A  definite  object  in  the  minds  of  a  good  many  editors 
of  the  more  substantial  house  periodicals  seems  to  be  that 
of  informing  employees  and  officers  of  the  house  relative 
to  certain  products  handled,  as  well  as  to  certain  methods 
of  organization.  This  information,  handled  by  specialists, 
or  men  who  have  much  to  do  with  these  respective  matters 
should  be  the  means  of  clearing  up  the  subject  in  a  concise 
but  comprehensive  way  in  the  minds  of  the  readers.  If 
the  firm  is  exporting  automobiles,  the  writer  of  the  article 
on  this  subject  would  naturally  go  somewhat  fully  into 
the  automobile  markets  in  foreign  lands,  not  forgetting  an 
outline  of  the  characteristics  of  the  people  who  are  to  use 
these  machines  in  other  nations,  as  well  as  to  show  the 
kind  of  automobiles  required,  manner  of  shipment  and  the 
best  sales  arguments. 

It  will  be  found  to  be  a  most  profitable  exercise  for  the 
head  of  any  department  or  specialist  along  any  line  to 


226       FOREIGN  TRADE   MARKETS  AND  METHODS 

gather  together  his  ideas  and  facts  concerning  his  par- 
ticular specialty  and  to  present  them  clearly  in  an  article 
for  the  house  organ.  This  article,  carefully  edited  and 
well  illustrated  with  pictures,  will  be  a  permanent  asset 
to  the  company  and  will  be  found  to  be  in  demand  for  a 
long  time  after  it  is  written.  For  example,  there  are  cer- 
tain articles  which  have  been  contributed  to  our  own 
house  magazine,  The  Grace  Log,  on  subjects  like  nitrate, 
cotton,  tea,  banking,  marine  insurance,  merchandising,  etc., 
which  have  been  republished  over  and  over  again  in  other 
trade  magazines  and  newspapers,  and  are  in  demand 
through  our  correspondence  a  year  or  more  after  they  have 
been  printed  in  our  periodical.  In  each  issue  of  this  maga- 
zine we  plan  to  have  one  such  educational  or  trade  article 
and  sometimes  two,  and  these,  among  other  uses  to  which 
they  are  placed,  are  used  in  a  reading  course  for  our  em- 
ployees who  are  to  be  sent  to  foreign  branches  as  managers 
or  in  other  capacities.  A  series  of  such  articles  covering  a 
year  or  more,  brought  together,  furnish  material  to  equip 
well  in  knowledge  the  young  man  who  wishes  to  know  not 
only  the  names  of  the  products  handled  by  the  firm,  but 
also  to  understand  something  of  the  history  of  these  prod- 
ucts; how  they  are  manufactured  or  cultivated,  how  fi- 
nanced, shipped,  marketed,  etc.  Much  depends  upon  the 
manner  of  presenting  this  educational  or  trade  article.  It 
can  be  made  as  dry  as  a  Congressional  Record  or  enlivened 
and  illuminated  by  picture  and  incident  so  that  the  article 
could  be  sold  to  6ne  of  our  good  popular  magazines.  This 
leads  me  to  a  brief  description  of  one  all  important  point, 
that  is,  "the  editor." 

We  have  already  alluded  to  the  fact  that  the  office  of 
editor  often  has  been  taken  by  a  person  having  little  or 
no  knowledge  of  the  writing  profession,  and  in  some  cases 
this  is  only  one  of  his  many  duties  in  connection  with  the 
firm.  Sometimes  we  find  this  office  is  taken  by  the  adver- 
tising manager  who  delegates  the  work  mainly  to  a  clerk. 
We  quote  in  this  connection  a  paragraph  of  a  letter  from 
Mr.  John  H.  Miller,  Editor  of  Counter  Currents: 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  227 

Putting  out  a  regular  publication  is  no  easy  task,  no  matter 
how  poor  the  thing  is.  But  to  edit  a  live,  up-to-the  minute  house 
organ  that  comes  any^vay  near  being  efficient  is  a  Real  Job. 

So  much,  depends  upon  the  selection  of  the  editorial 
director  of  a  magazine  that  we  are  inclined  to  believe  that 
unless  a  house  has  sufficient  confidence  in  the  value  of  this 
medium  to  pay  the  salary  of  a  man  of  intelligence  and 
experience  for  its  editorial  director  it  would  be  far  better 
not  to  undertake  at  all  the  publishing  of  a  house  magazine. 
Of  course,  if  the  desire  is  for  only  a  little  bulletin  giving 
notices  of  personal  events,  athletics  and  social  gatherings 
among  the  employees,  the  editorial  function  is  not  so  dif- 
ficult ;  but,  even  then,  the  house  is  represented  by  the  bulle- 
tin, large  or  small,  and  if  this  gives  the  appearance  of 
cheapness  and  hasty,  inexperienced  production,  it  will  off- 
set much  of  the  value  of  the  publication. 

The  editor  of  a  house  organ  should  himself  have  the 
capacity  for  writing,  but  more  than  this  he  should  possess 
the  ability  to  arouse  the  writing  or  descriptive  instinct 
among  the  members  of  the  organization  who  have  at  their 
fingers'  end  the  facts  of  value  to  the  constituency.  Of 
course  it  is  the  editor's  duty  to  talk  over  a  prospective 
article  with  the  man  whose  experience  he  wishes  to  capi- 
talize for  the  magazine,  giving  him  perhaps  a  suggestive 
outline.  It  is  vitally  important,  however,  that  the  man 
who  knows  his  job  or  his  specialty  should  be  left  free  to 
express  himself  as  to  the  outstanding  characteristics, 
obstacles,  or  needs  of  this  work,  and  when  he  has  done  this 
the  editor  will  find  ample  opportunity  in  the  careful  edit- 
ing of  the  material,  in  the  writing  of  foreword  and  con- 
clusion, and  in  general  structural  arrangement,  for  the 
exercise  of  his  proper  literary  faculty.  No  editor  should 
take  it  upon  himself  to  write  his  whole  magazine.  The 
editor  who  attempts  to  do  this  is  in  a  bad  way.  He  mil 
soon  run  out  of  ideas  and  the  magazine  will  become  a  one- 
man  affair,  thereby  losing  general  interest  and  missing  the 
widespread  perspective  which  comes  from  getting  messages 


228        FOREIGN  TRADE  MARKETS  AND  METHODS 

from  every  angle  of  the  clientele.  It  should  be  the  aim  to 
have  as  many  names  of  members  of  the  organization  as 
possible  appearing  in  every  number. 

It  is  needless  to  say  that  among  the  characteristics  of  a 
successful  editor  for  any  kind  of  a  periodical  are : 

First:  An  ability  to  express  his  own  ideas  clearly. 
Second:  A  sense  of  humor.  Third:  Some  organization 
or  constructive  ability  in  the  handling  of  his  material  so 
that  the  magazine  may  give  the  appearance  of  a  well  built 
structure  rather  than  a  hit  and  miss  affair.  Fourth:  A 
certain  congeniality  which  will  enable  him  in  acquaint- 
anceship with  employees  to  be  sufficiently  liked  that  when 
he  asks  for  contributions  the  persons  will  be  inclined  to 
accept  the  opportunity  because  of  personal  relationship 
with  the  editor  as  well  as  by  reason  of  their  connection 
with  the  firm,  or  through  pride  of  office.  Fifth:  It  goes 
almost  without  saying  that  the  editor  or  a  director  of  pub- 
lications of  a  large  business  house  must  make  a  study  of 
the  entire  business  in  order  to  avoid  mistakes  and  be  able 
to  present  in  his  periodical  a  well  rounded  and  compre- 
hensive picture  of  the  entire  circle  of  the  firm's  activities. 
Sixth:  The  ability  to  write  editorials  timely  and  inter- 
pretative regarding  the  different  subjects  related  to  the 
business  of  his  firm,  including  a  brief  digest  of  current 
events.  Seventh:  Industry  and  a  willingness  to  exert 
oneself  to  secure  proper  material  are  absolutely  necessary 
qualifications  for  an  editor.  As  one  correspondent  writes 
— * '  If  you  want  anything,  go  and  get  it ! " 

Furthermore,  an  attractive  house  organ  can  hardly  be 
widely  effective  without  pictures.  A  modem  magazine  with- 
out pictures  is  like  a  marriage  without  the  bride.  In  this 
picture  age  the  eye  is  becoming  almost  as  important  as  the 
mind  in  gathering  impressions.  Photographs  that  are  care- 
fully captioned  are  frequently  the  only  part  of  a  magazine 
which  is  read  by  certain  busy  men.  These  pictures  should 
be  so  thoughtfully  described  in  the  captions  that  if  the 
reader  gets  nothing  else  from  a  look  into  a  certain  issue 
he  will  at  least  be  able  to  get  the  running  story  by  looking 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  229 

at  the  pictures.  It  is  better  usually  to  have  fewer  photo- 
graphs but  have  them  carefully  selected  and  the  cuts  clear. 

The  cover  of  the  magazine,  of  course,  is  a  matter  of  con- 
siderable moment  and  should  be  decided  usually  from  the 
point  of  view  of  the  character  of  the  concern  and  the  object 
of  the  magazine.  There  is  no  doubt  but  that  a  change  of 
cover  frequently  adds  to  the  interest  and  every  editor  will 
realize  the  necessity  of  giving  considerable  thought  to  the 
cover  when  it  is  not  feasible  to  spend  the  money  for  making 
a  new  sketch  and  engraving  for  each  number.  A  change  in 
color  of  a  stock,  with  a  few  of  the  interesting  articles  played 
up  on  the  cover  is  often  found  attractive. 

Maps  of  localities,  clearly  drawn,  are  greatly  to  be 
desired,  as  also  are  ingenious  charts  that  are  not  too  com- 
plicated to  be  impregnable.  We  have  seen  many  charts 
and  maps  which  leave  the  reader  in  a  more  perplexed  state 
than  he  was  before  he  tried  to  unravel  their  complicated 
detail  and  serpentine  intersections  of  lines  and  circles.  We 
saw  a  chart  recently  of  this  kind  that  reminded  us 
of  what  a  reviewer  said  of  the  book  of  Dr.  Shedd,  the  old 
theologian.  He  wrote  two  volumes  of  dry-as-dust  theology 
and  when  the  second  volume  came  out  the  reviewer,  a 
prominent  newspaper  man,  reviewed  it  as  follows: 

The  first  volume  Dr.  Shedd  wrote,  only  Dr.  Shedd  and  God 
understood  it!    In  the  last  volume  God  dropped  out! 

A  selection  of  pictures  to  really  illustrate  the  ideas  and 
facts  brought  out  in  the  text  is  all-important.  The  play- 
ing up  of  a  lot  of  personal  photographs  is  more  or  less 
taboo  with  many  of  the  higher  class  corporation  magazines, 
but  it  should  not  be  forgotten  that  a  successful  business  is 
dependent  upon  men  quite  as  much  as  machines  or  methods, 
and  the  publishing  occasionally  of  a  man's  picture  when 
he  has  given  twenty-five  years  of  successful  service  to  the 
work,  or  the  photograph  of  a  victorious  football  team  com- 
posed of  employees,  or  the  picture  of  a  manager  of  a 
large  plant  directing  his  employees,  or  possibly  a  large 


230        FOREIGN  TRADE  MARKETS  AND  METHODS 

group  picture  of  officers  and  employees,  all  when  properly 
treated,  add  to  the  impression  that  human  leadership  and 
trained  workers  form  the  vital  life  currents  of  any  busi- 
ness. 

It  should  also  be  noted  that  one  of  the  objects  of  the 
house  organ  is  to  show  the  worker  that  his  service  is  appre- 
ciated. There  is  none  too  much  of  this  kind  of  appreciation 
given,  as  a  rule,  to  employees  in  large  concerns.  Too  often 
the  condition  exists,  as  was  related  to  me  recently  by  a 
senior  member  of  a  certain  firm,  who  said : 

Never  expect  any  praise  for  anything  you  do  in  this  firm,  but 
if  you  don't  get  jumped  on  more  than  six  times  a  day  through- 
out the  365  days  of  the  year  you  can  take  it  for  granted  that 
you  are  doing  good  work. 

While  the  house  organ  should  not  have  as  its  chief  object- 
ive the  printing  of  flattering  notices  which  tends  often 
to  make  workers  self-conscious  and  vainglorious,  a  moderate 
presentation  of  personal  photographs  in  connection  with 
notable  achievement  is  usually  worth  while. 

We  have  found  that  the  appointing  of  regular  cor- 
respondents to  our  magazine  from  other  branches  both  at 
home  and  abroad  is  a  most  successful  experiment.  These 
appointees,  after  they  have  been  carefully  selected  by  the 
manager  of  the  branch,  are  appointed  with  some  formality 
and  are  made  to  feel  that  the  office  is  a  dignified  and 
responsible  one  and  that  their  communications  are  expected 
to  be  both  regular  and  worth  while.  It  is  important  to  send 
a  letter  to  each  correspondent,  outlining  in  detail  the  kind 
of  material  and  photographs  particularly  desired  from  his 
section,  otherwise  he  will  be  quite  at  sea  as  to  what  to  send 
in,  with  the  result  that  he  will  forward  perhaps  useless 
insignificant  matter,  and  the  turning  down  of  such  con- 
tributions are  quite  likely  to  discourage  a  new  corre- 
spondent. 

It  is  our  custom  to  send  a  copy  of  our  house  magazine 
personally  to  each  correspondent  as  soon  as  it  is  issued, 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  231 

and  in  many  cases  it  is  accompanied  by  a  note  of  apprecia- 
tion when  the  correspondent  has  taken  particular  trouble 
to  outline  an  important  business  situation,  or  with  consider- 
able effort  has  secured  good  photographs.  The  names  of 
the  correspondents  are  published  in  the  magazine,  and  it  is 
considered  an  honor  on  the  part  of  the  correspondent  to 
represent  his  branch  house  or  agency  in  regular  communica- 
tions each  month. 

A  special  annual  number  made  up  largely  of  photographs 
of  different  phases  of  the  firm's  activities  is  found  to  be  of 
decided  use  for  advertising  and  propaganda  purposes. 
Photographs  for  this  number  are  gathered  from  branches 
of  industries  all  over  the  world,  and  the  making  of  these 
pictures  and  sending  them  in,  with  careful  descriptions 
attached  to  each,  arouse  great  interest  on  the  part  of  the 
various  branches.  In  the  case  of  Tlie  Grace  Log  four  or 
five  hundred  pictures  are  published  in  this  annual  number. 
The  first  number  was  composed  of  pictures  largely  of  the 
150  or  more  branches  and  agencies  of  the  firm,  buildings 
and  photographs  of  the  staff,  with  certain  attractive  inner 
views  of  the  buildings,  also  pictures  of  ships,  plants,  clubs 
and  welfare  organizations  representing  the  company  in 
different  countries.  The  second  annual  number  published 
contained  photographs  of  the  industrial,  transportation 
and  active  enterprises  of  the  Company. 

It  is  customary  to  put  into  this  annual  number  only 
photographs  representing  the  owned  enterprises,  buildings, 
etc.,  of  the  firm.  An  issue  of  from  15,000  to  20,000  copies 
is  found  necessary  to  supply  the  widespread  and  exacting 
demands  upon  the  Editorial  Department  for  this  number. 
Many  departments  and  branches  send  copies  of  this  num- 
ber with  personal  letters  to  their  clients  with  direct  and 
encouraging  business  results.  These  special  numbers  are 
also  reviewed  by  the  daily,  weekly  and  monthly  press  in 
different  languages  and  different  countries.  We  earnestly 
recommend  this  phase  of  the  house  publication's  work.  In 
this  number,  as  in  the  regular  monthly  publication,  the 
introduction  of  attractive  pen  and  ink  sketches  are  most 


232        FOREIGN  TRADE  MARKETS  AND  METHODS 

desirable.  It  should  be  the  object  to  make  the  immber  a 
delight  to  the  eye  as  far  as  possible  and  to  avoid  a  stilted 
and  dull  procession  of  pictures  notable  only  by  their 
similarity.  For  this  special  number  a  first-class  drawing 
is  made  for  the  cover  and  it  is  the  aim  to  carry  the  story 
of  the  work  by  pictures  and  captions  rather  than  by 
articles.  A  two  page  spread  of  a  map,  showing  by  colored 
lines  the  various  shipping  and  cable  lines,  also  cities  and 
towns  where  branches  of  the  company  are  located  printed 
in  red,  together  with  a  list  of  the  branches  at  the  bottom 
of  the  map,  has  been  found  to  be  of  real  value.  In  fact, 
in  addition  to  the  reproduction  of  regular  photographs  we 
commend  the  use  of  sketches  and  drawings  which  add  not 
only  artistic  value  to  the  magazine,  but  also  can  be  made 
to  represent  important  phases  of  the  work  which  are  dif- 
jBcult  to  present  in  photographs.  Quite  often  artistic  talent 
may  be  found  in  the  firm  itself;  or  in  other  cases  it  is 
possible  for  the  editor  to  secure  some  amateur  help  among 
his  friends  without  undue  expense.  In  some  cases  the 
art  editor  has  combined  with  service  to  the  magazine 
the  post  of  librarian  in  the  library  which  is  also  connected 
with  the  Editorial  Department. 

The  distribution  of  the  house  magazine  depends,  of 
course,  upon  its  object,  whether  it  is  published  simply 
for  the  employees,  for  directors,  for  sales  managers,  or  for 
purely  propaganda  or  advertising  purposes  among  other 
firms. 

In  the  case  of  The  Grace  Log  the  chief  object  is 
to  publish  a  magazine  directed  to  the  business  needs 
of  the  Company,  which  because  of  its  size,  gives  a 
formidable  audience.  In  addition,  however,  the  maga- 
zine is  sent  outside  the  circle  of  the  organization, 
usually  upon  application,  to  government  officials  of  dif- 
ferent nations,  such  as  ambassadors,  ministers,  commercial 
attaches  and  consuls ;  also  to  the  larger  libraries,  clubs  and 
societies  more  or  less  closely  connected  with  business  affairs, 
in  exchange  for  trade  journals  and  house  organs;  to  se- 
lected portions  of  the  weekly  and  daily  press;  and  to 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  233 

manufacturers  and  clients  both  at  home  and  abroad  selected 
with  some  care  by  the  departments  most  closely  connected 
in  a  business  way. 

Leading  articles  are  republished  by  newspapers  as  well 
as  by  weekly  and  monthly  magazines,  and  usually  we  are 
able  to  furnish  pictures  and  sometimes  cuts  for  such  use. 

A  letter  is  also  sent  to  branch  managers  suggesting  the 
most  successful  ways  in  which  the  magazine  may  be  dis- 
tributed, employed  to  carry  the  message  of  the  firm  to  the 
section  in  point.  A  certain  quota  is  mailed  as  soon  as  pos- 
sible after  publishing  date  to  each  branch  and  agency,  and 
there  are  insistent  calls  received  from  the  various  branches 
for  increased  numbers  of  the  magazine.  From  time  to 
time  it  has  been  found  necessary  to  increase  the  edition 
in  order  to  accommodate  the  growing  needs  of  the  branches. 
It  is  the  general  rule  that  branches  and  agencies  receive 
a  sufficient  number  of  copies  so  that  each  member  or  em- 
ployee may  have  a  copy.  This,  however,  is  not  followed 
out  in  the  case  of  large  industrial  plants,  but  the  attempt 
is  made  to  meet  the  requirements  as  far  as  possible  of  the 
various  foreign  offices. 

We  find  it  out  of  the  question  to  send  the  magazine 
regularly  to  all  of  the  applicants  who  ask  for  it,  but  when 
possible  we  strive  to  refer  the  inquirers  to  such  organiza- 
tions as  the  Bureau  of  Foreign  and  Domestic  Commerce  at 
"Washington  and  to  special  organizations  giving  attention 
to  the  subjects  that  seem  to  be  along  the  line  of  their  needs. 

The  distribution  at  the  home  office  is  carried  on  by  giv- 
ing a  copy  on  the  night  of  the  day  of  publication  to  each 
employee  as  he  leaves  the  building.  In  the  cases  of  certain 
other  house  magazines  we  find  that  the  magazines  are  given 
out  only  to  those  who  have  interest  enough  or  will  take  the 
trouble  to  call  at  the  editorial  office. 

It  is  significant  to  note  from  our  correspondence  and  our 
own  experience  with  the  magazines  which  are  edited  with 
care  and  reflect  the  spirit  of  the  house,  that  every  issue 
is  in  such  demand  that  the  magazine  is  prized  and  usually 
taken  home  and  frequently  bound  in  a  file.    It  is  our  own 


234       FOREIGN  TRADE  MARKETS  AND  METHODS 

custom  to  bind  our  house  magazine,  as  well  as  our  other 
publications,  every  six  months  in  separate  volumes  with 
pasteboard  covers,  having  these  volumes  always  on  refer- 
ence in  the  Editorial  Department.  The  same  custom  is 
followed  by  many  of  the  larger  branch  offices. 

It  seems  to  be  the  general  custom  among  house  organs 
not  to  receive  advertising  and  also  not  to  make  a  charge 
for  the  magazine.  Among  the  letters  received  from  quite 
a  wide  circle  of  house  organ  editors  we  find  only  two  or 
three  who  accept  advertising.  One  correspondent,  however, 
states : 

A  publication  of  any  kind  to  get  proper  attention  must  have 
a  paid-in-advance  circulation  list.  The  paper  sent  gratis  does 
not  have  the  same  value. 

The  consensus  of  opinion  seems  to  be  that  the  house 
organ,  or  some  medium  expressing  the  spirit  and  ideals  of 
the  firm,  should  be  financed  by  the  house  itself  and  that  the 
values  of  such  a  magazine  are  returned  to  the  house  mani- 
fold in  incidental  advertising,  propaganda  and  good 
will  engendered  by  such  publications.  Simply  because  the 
influence  of  the  house  organ  is  not  direct  and  capable  of 
being  estimated  in  dollars  and  cents,  is  no  proof  that 
the  magazine  does  not  carry  real  business  and  monetary 
values  for  the  firm. 

The  budget  for  the  house  organ  is  a  varying  quantity, 
of  course,  in  accordance  with  the  number  of  copies  issued, 
the  amount  of  engraving  costs,  and  the  general  make-up 
and  extent  of  the  mailing  list.  We  find  letters  in  our 
correspondence  which  in  several  cases  show  an  issue  of 
35,000  or  40,000  copies  of  the  house  magazine,  with  a  cost 
of  from  $2000  to  $5000  per  issue  in  accordance  with  the 
size,  quantity,  quality,  etc.  The  majority  of  house  organs, 
however,  find  it  necessary  to  limit  their  edition  to  a  smaller 
number  and  hence,  of  course,  to  a  smaller  cost. 

It  seems  to  be  the  general  experience  in  every  case  where 
a  really  worthwhile  house  organ  or  corporation  magazine 
is  published,  that  the  real  worth  of  this  publication  is  soon 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  235 

recognized  and  tlie  officers  of  the  firms  gradually  are  led 
to  the  conviction  that  money  spent  thus  is  quite  as  far- 
reaching  as  any  form  of  advertising  or  promotion  carried 
on  by  the  house. 

Even  a  brief  survey  of  this  important  field  would  not  be 
complete  without  some  allusions  to  the  difficulties  con- 
fronting house  organs.  Among  these,  as  they  have  come 
to  us  in  recent  correspondence,  are  the  following: 

Western  Electric  News. — One  of  our  early  difficulties  was  to 
get  executives  to  pass  material  which  was  written  in  a  way  to 
appeal  to  the  rank  and  file.  This  has  been  overcome  practically 
entirely.  The  contents'  of  the  magazine  are  now  selected  by  the 
managing  editor  with  the  approval  of  the  Board  of  Advisory 
Editors  who  represent  all  departments  of  the  business. 

The  Lamp. — We  are  extremely  fortunate  in  having  a  President 
who  is  absolutely  sold  on  the  magazine.  He  not  only  gives  his 
heartiest  cooperation  to  everything  that  is  proposed,  but  originates 
many  ideas  to  be  worked  up.  We  have  no  real  difficulties  except 
that  of  closing  down  on  contributions  in  time  to  get  our  magazine 
out  before  the  month  for  which  it  is  dated  has  passed. 

The  Express  Messenger. — Our  chief  difficulties  seem  to  be  in 
compressing  all  the  information  and  news  that  we  would  naturally 
gather  from  a  nation-wide  organization,  into  sixteen  pages. 

The  Walworth  Log. — Difficulties  in  gathering  material  would 
fill  more  volumes  than  are  contained  in  the  patent  office.  Our 
chief  and  only  encouragement  is  'your  last  number  was  not  quite 
as  good  as  the  pi'evious  one.' 

Stewart  Factory  News. — One  of  the  chief  difficulties  which  I 
have  to  contend  with  is  the  failure  of  our  dealers  and  employees 
to  contribute.  We  send  out  appeal  after  appeal,  both  in  the 
factory  and  around  to  our  dealers,  for  articles,  tips  and  sugges- 
tions of  any  kind,  but  as  time  goes  on  we  find  that  the  help 
and  aid  we  get  is  about  as  'scarce  as  hen's  teeth.'  However,  if 
we  fail  to  get  out  an  issue  on  time  the  result  is  that  our  employees 
and  dealers  never  let  us  hear  the  last  of  it,  from  which  fact  it 
is  evident  that  they  are  keen  about  house  organs,  but  are  not 
long  in  contributing  to  their  make-up. 

Westinghouse  Electric  News. — Many  employees  who  have  left 
our  company  have  requested  continuation  of  'The  News.'     Wa 


236       FOREIGN  TRADE  MARKETS  AND  METHODS 

see  it  on  trains  and  street  ears,  being  read  and  taken  home.  Our 
telephone  is  busy  when  it  is  late.    Are  we  discouraged?    No! 

The  Headlight. — Our  main  difficulty  is  in  securing  copy  that 
will  interest  all  classes  of  employees.  You  probably  know  our 
plants  are  scattered  about  the  country  and  while  personal  items 
are  very  much  appreciated  by  the  employees  at  one  particular 
plant  the  same  people  are  not  known  at  the  other  plants.  It  is, 
therefore,  necessary  to  try  to  secure  copy  which  will  be  read  by 
aU  employees  at  all  plants.  Our  chief  encouragement  lies  in  the 
fact  that  if  we  are  a  bit  late  with  our  issue  the  inquiries  are 
numerous  as  to  whether  it  has  been  stopped  and  the  men  appear 
very  anxious  to  get  it  at  the  time  it  is  handed  out  with  the  pay 
envelopes.  The  magazine  is  not  thrown  away  but  is  taken  home 
and  read. 

U.  F.  Co.  News. — The  greatest  difficulty  I  have  encountered  is 
satisfying  the  majority  of  employees.  To  illustrate:  a  number  of 
them  will  send  in  various  items  which  are  of  no  interest  to  anyone 
other  than  themselves,  and  upon  the  failure  of  these  articles  to 
appear  in  the  magazine,  dissatisfaction  arises,  and  the  same  result 
occurs  with  other  parties  when  such  articles  are  published.  The 
best  way  out,  which  I  have  found,  is  not  to  publish  them. 

General  Chemical  Bulletin. — Our  chief  difficulties  are  with  the 
printers.  Our  chief  encouragement  is  that  while  our  publication 
is  given  out  to  employees  only  on  request,  nearly  eighty  per  cent 
of  them  call  for  it  personally. 

The  last  year  has  been  a  particularly  trying  one  for  all 
kinds  of  publishers  and  we  find  that  a  good  number  of 
house  organs  have  been  discontinued  because  of  depression 
in  business,  the  high  cost  of  paper,  engraving  and  printers' 
troubles.  In  some  cases  house  organs  usually  published 
in  large  cities  are  sent  out  to  printing  firms  in  smaller 
towns,  thereby  saving  considerable  expense. 

Although  the  difficulties  covered  in  the  above  quotations 
are  real  ones  and  are  in  line  with  the  obstacles  confronting 
editors  of  this  class  of  publication  generally,  none  of  them 
are  so  formidable  as  not  to  be  overcome  by  editors  who  are 
reaUy  qualified  for  their  important  posts.  As  Napoleon 
once  said,  "Difficulties  are  things  to  be  overcome!"  and  it 
is  well  for  every  editor  to  remember  that  he  is  not  the  only 


THE  HOUSE  ORGAN  IN  FOREIGN  TRADE  237 

man  who  is  confronted  with  ''insurmountable  difficulties." 
In  some  cases  it  is  necessary  first  of  all  for  the  editor  to 
make  his  magazine  so  good  and  so  indispensable  to  the 
business  that  he  can  sell  it  to  the  management.  Many 
members  of  old,  conservative  business  firms,  who  have  taken 
an  indifferent  or  critical  attitude  to  the  house  organ  at  its 
inception,  have  been  won  over  completely  after  seeing  the 
interest  displayed  in  the  publication  on  the  part  of 
employees,  and  after  realizing  the  possibility  of  the  house 
organ  among  the  salesmen  or  clients  of  the  firm. 

We  come  back  then  to  the  point  which  we  consider  more 
vital  than  any  other  in  the  whole  subject,  that  is,  the  pres- 
ence of  an  editorial  leader  who  possesses  vision,  tact,  cer- 
tain literary  ability  and  a  dogged  determination  to  make 
his  publication  useful  to  the  firm.  A  business  or  corpora- 
tion is  more  or  less  impersonal.  A  house  organ  must  per- 
sonalize and  make  tangible  the  ideas  and  methods  of  the 
company.  This  art  of  bringing  the  organization  to  a  clear 
focus,  this  visualization  of  the  company's  ideas  and  ideals, 
is  brought  about  largely  by  the  ability  and  ingenuity  of 
the  editorial  direction.  If  this  is  competent  both  the  spirit 
and  the  method  of  the  business  involved  will  be  so  breathed 
through  the  magazine  that  it  will  truly  represent  the 
House. 


CHAPTER  XIV 

NEWSPAPERS  AND  PERIODICALS  AS  FOREIGN  TRADE 
BUILDERS 

The  daily  press  and  the  periodical,  both  at  home  and 
abroad,  are  among  the  most  potent  means  of  extending 
foreign  commerce.  This  propaganda  has  failed  in  many 
instances  through  lack  of  knowledge  as  to  how  and  where 
to  place  advertising  material. 

For  the  benefit  of  those  who  would  learn  the  character 
of  the  press  as  a  means  of  advertising  products,  particularly 
in  South  America,  I  quote  some  remarks  made  in  my 
former  book  The  Brazilians  and  Their  Country: 

There  is  no  doubt  but  that  the  work  of  the  press  in  the 
United  States  has  been  instrumental  in  recent  years  in 
arousing  a  new  and  widespread  interest  in  the  South 
American  Republics.  One  American  consul  informed  me 
that  in  the  years  1914-1915,  when  South  America  became 
particularly  prominent  in  our  newspaper  world,  he  received, 
largely  from  business  men  in  the  United  States,  ten 
thousand  two  hundred  pieces  of  mail.  There  were  floods  of 
letters  about  every  conceivable  subject  germane  to  the 
securing  of  South  American  business,  and  a  deluge  of  cata- 
logues, which  for  the  most  part,  being  printed  only  in 
English,  were  quite  useless  to  prospective  Latin  American 
customers. 

It  is  quite  evident  from  a  study  of  this  particular  subject 
that  the  American  press  as  a  whole  has  failed  to  include 
in  its  information  concerning  South  America  many  facts 
of  prime  importance,  and  in  some  cases  it  has  so  highly 

238 


NEWSPAPERS  AS  FOREIGN  TRADE  BUILDERS     239 

colored  other  facts  as  to  give  a  wrong  impression.  For 
example,  one  will  be  told  by  the  most  levelheaded  business 
men  in  South  America  that  while  there  is  a  real  opportunity 
for  large  capital,  and  for  those  firms  to  enter  the  arena  of 
trade  which  can  meditate  enterprises  like  the  building  of 
railroads,  the  opening  of  mines,  the  construction  of  large 
docks  or  the  starting  of-  steamship  lines,  the  opportunity 
for  the  man  with  little  capital  and  with  no  branch  house 
in  South  America  is  more  greatly  limited.  The  press  would 
do  well  to  emphasize  the  fact  that  the  American  business 
man  who  goes  down  there  is  at  once  confronted  with  the 
Spaniard,  the  German,  the  Englishman,  the  Italian  and 
the  Portuguese,  who  are  at  home  in  the  language  of  the 
people;  who  in  many  cases  have  inherited  generations  of 
experience  in  selling  goods  to  the  South  Americans,  and 
who  also  are  probably  unsurpassed  as  intelligent  traders 
for  these  countries.  To  meet  such  competition,  the  Ameri- 
can business  man  must  "go  after"  his  foreign  markets. 

The  truth  about  South  America  would  include  also  the 
fact  that  the  sending  of  young,  inexperienced  men  down 
there  to  cope  with  these  hardened  veterans  in  trade  has 
proved  disastrous  to  many  a  firm ;  a  further  truth  which 
may  not  be  too  often  repeated  is  that  the  South  American 
is  not  predisposed  to  trade  with  North  Americans,  and  he 
is  quite  as  independent  relative  to  this  matter  as  are  our 
own  manufacturers. 

It  is  quite  evident  to  an  unprejudiced  observer  that 
South  American  business  is  not  a  prize  to  be  gained  at  a 
bound;  it  must  be  necessarily  an  evolution,  for  the  South 
American  does  nothing  in  trade  lines  in  a  hurry.  His 
conservatisms  and  traditions  hold  him  as  in  a  vise.  It  will 
take  every  ounce  of  ingenuity  and  perseverance  which  the 
North  American  business  man  possesses  to  gain  an  equal 
footing  in  these  republics  with  England,  for  example,  and 
if  he  accomplishes  this  in  the  next  twenty  years,  it  will  be 
by  dint  of  the  keenest  exertion  and  a  far  more  profound 
study  of  the  South  American  people  and  their  country 
than  he  has  yet  deigned  to  give  them.    This  at  least  is  the 


240        FOREIGN  TRADE  MARKETS  AND  METHODS 

common  testimony  which  one  who  mixes  with  all  sorts  of 
business  men  in  these  countries  will  receive  to-day. 

Another  contribution  which  the  press  of  the  United 
States  may  make  in  the  interests  of  mutual  relationships 
would  be  a  more  careful  study  of  South  American  jour- 
nalism, especially  with  the  view  of  publishing  material  in 
these  papers  which  the  South  Americans  would  gladly  read, 
and  which  would  enable  them  in  turn  to  get  acquainted 
with  the  United  States. 

While  I  was  in  Lima,  Peru,  the  leading  newspaper  was 
publishing  a  series  of  articles  upon  conditions  in  North 
America  which  were  making  a  decided  impression  in  that 
city.  The  articles  were  a  revelation  to  many  who  had  as 
little  conception  of  what  the  United  States  was  like  as 
that  possessed  by  many  of  our  people  regarding  the  Land 
of  Pizarro.  The  editors  of  many  newspapers  have  told 
me  that  they  would  be  glad  to  form  connections  with  news- 
papers in  the  United  States  for  such  articles,  and  they  also 
have  said  that  they  realize  that  their  papers  give  far  more 
space  to  European  matters  and  to  their  sister  Republics 
than  to  their  Northern  neighbors. 

In  writing  these  articles  it  should  be  remembered  that 
the  Latin  American  has  a  different  idea  of  the  presenta- 
tion of  his  material  than  does  our  press.  It  would  seem  to 
Northerners  to  be  lacking  in  system,  and  frequently  as 
dull  as  a  Census  report.  One  of  the  largest  news- 
papers in  Spanish  America  makes  a  boast  that  it  has  never, 
during  its  entire  eighty  years  of  history,  published  a  pic- 
ture. Glaring  headlines  also  are  conspicuous  by  their  absence 
in  the  best  journals,  while  long  communications  on  serious 
subjects  are  given  considerable  space,  sometimes  even  a 
whole  page.  The  Jornal  do  Commercio,  for  example,  while 
I  was  in  Brazil,  gave  eleven  columns  of  space  to  the  account 
of  an  event  of  the  Academy  of  Letters  in  Rio  de  Janeiro, 
while  it  is  not  uncommon  in  South  American  journalism 
to  find  several  pages  given  to  the  verbatim  description  of 
a  debate  in  Congress. 

It  is  said  that  the  South  American  reads  only  his  news- 


NEWSPAPERS  AS  FOREIGN  TRADE  BUILDERS     241 

paper,  and  also  that  the  newspapers  are  responsible  for  the 
molding  of  sentiment  in  a  way  far  beyond  that  known  in 
other  parts  of  the  world.  One  editor  told  me  that  he  nearly 
lost  his  life  because  the  people  claimed  that  his  paper  was 
responsible  for  starting  the  greatest  revolution  which  his 
country  had  ever  experienced.  One  only  needs  to  go  to  the 
clubs  to  see  the  crowds  of  men  surrounding  the  newspaper 
tables,  and  then  visit  the  libraries  of  these  institutions 
(which  is  the  one  place  in  the  building  where  you  can  be 
perfectly  sure  of  being  quite  alone),  in  order  to  recognize 
the  influence  of  the  newspaper  among  the  Latin  American 
gentry. 

Another  service  which  might  well  be  entered  upon  as  a 
policy  by  certain  of  our  newspapers  and  publishers  who  are 
interested  in  Pan- Americanism,  would  be  to  start  a  cam- 
paign for  travelers  to  South  America.  In  the  last  analysis 
the  only  way  to  understand  a  country  is  to  go  and  see  it,  and 
the  study  of  successful  American  business  south  of  the 
Eio  Grande  proves  beyond  a  shadow  of  a  doubt  that  it  has 
been  a  farsighted  plan  for  manufacturers  themselves  to 
visit  these  countries  in  person  before  spending  their  money 
upon  projects  that  would  have  been  found  at  once  by  them 
to  have  been  impracticable  had  they  previously  visited  the 
country.  Some  day,  not  far  off,  South  America  is  to  be 
the  traveler's  paradise.  In  Cuzco  and  along  the  whole 
stretch  of  the  Cordilleras  one  will  find  conditions  as  primi- 
tive as  exist  in  any  part  of  the  Orient;  in  Southern  Chile 
there  is  a  beauty  of  mountain  and  sea  which  rivals  any- 
thing to  be  seen  in  the  Alps;  the  haciendos  of  Argentina, 
the  coffee  plantations  of  Brazil  and  the  rubber  regions  of 
the  Amazon  make  unforgettable  impressions  upon  the 
traveler;  while  the  American  will  travel  the  world  over 
through  all  his  years  without  finding  such  a  dream  city  of 
enchantment  as  is  Rio  de  Janeiro,  lodged  in  an  amphi- 
theater of  hills,  and  looking  down  through  tropical  sun- 
shine upon  its  peerless  bay. 

Furthermore,  if  the  press  of  the  United  States  would  get 
on  with  the  South  American,  it  should  realize  that  adverse 


242       FOREIGN  TRADE  MARKETS  AND  METHODS 

criticism  without  presenting  the  more  promising  traits  of 
the  country  and  the  people,  is  fatal  to  success.  One  is 
dealing  with  a  different  temperament  there,  and  with 
natures  as  sensitive  to  dispraise  as  are  the  Orientals.  They 
are  willing  to  have  their  weaknesses  pointed  out  providing 
a  man  is  simpdtico  in  the  manner  of  his  presentation. 
There  is  not,  in  this  part  of  the  world,  the  custom  common 
in  the  United  States  and  England  of  hitting  every  head 
that  comes  to  the  surface.  When  they  do  hit  them,  it  is 
done  with  politeness. 

A  writer  on  South  America  said  recently  in  his  preface 
that  enough  flattering  remarks  had  been  made  concerning 
these  people,  and  it  was  his  intention  in  his  book  virtually 
to  show  them  up  with  all  their  weaknesses  and  faults.  It 
is  needless  to  say  that  such  an  announcement  doomed  the 
book  in  the  minds  of  many  of  these  intelligent  and  keenly 
sensitive  people.  As  a  matter  of  fact,  the  press  of  the 
United  States  can  find  remarkable  material  for  the  interest 
of  its  readers  in  the  old  settlements  of  this  hemisphere 
which  are  only  just  learning  to  become  Republics.  The 
history  of  Simon  Bolivar  the  "Liberator,"  of  San  Martin, 
of  Pizarro  in  Peru,  of  Valdivia  in  Chile,  or  of  Cortes  in 
Mexico,  is  as  fascinating  in  adventure  as  historical  romance ; 
while  Paraguay  with  its  Dictator  Lopez  and  its  war  in 
1860  that  practically  eliminated  every  man  in  Para- 
guay, or  the  picturesque  colonial  and  imperial  history 
of  Brazil,  the  only  large  American  Republic  which  has 
possessed  an  Emperor,  read  like  the  story  of  "a  thousand- 
and-one-nights. ' ' 

Foreign  trade  is  a  far  bigger  thing  than  shopkeeping,  or 
consular  statistics.  It  is  based  upon  national  characteristics, 
and  its  ramifications  are  as  wide  as  history  and  as  vital  as 
personality.  No  one  travels  abroad  with  seeing  eyes  who 
does  not  recognize  the  provincialism  in  many  sections  of 
our  press  in  the  United  States.  In  this  era  of  world 
expansion,  when  the  nations  of  the  earth  are  drawing  to- 
gether, in  order  to  be  able  to  live  separately,  the  news- 
paper that  limits  itself  to  the  locality  where  it  happens  to 


NEWSPAPERS  AS  FOREIGN  TRADE  BUILDERS     243 

be  published  is  destined  to  a  career  of  superficial  and  short- 
sighted opinion. 

The  press  of  the  United  States  needs  editors  with  tele- 
scopes as  well  as  microscopes.  The  newspaper  is  the  mirror 
held  up  to  human  nature,  and  human  nature  is  not  bounded 
by  any  such  narrow  limits  as  north  or  south,  or  east  or 
west ;  it  is  a  world  thing,  and  it  includes  as  Kipling  would 
say,  every  country  ''where  two  strong  men  stand  face  to 
face." 

There  are  signs  apparent  that  the  press  of  North  America 
is  beginning  to  realize  this,  and  it  is  one  of  the  most  en- 
couraging symptoms  on  the  horizon,  not  only  as  far  as 
relationships  with  South  America  are  concerned,  but  also 
as  regards  the  intelligent  part  that  the  United  States  may 
be  called  upon  to  assume  in  the  fraternal  federation  of  the 
world. 

There  is  no  doubt  but  that  advertising  in  newspapers 
and  periodicals,  both  at  home  and  abroad,  would  be  doubled 
in  value  if  such  publications  possessed  the  right  point  of 
view  in  relation  to  foreign  lands,  and  carried  in  their  news 
columns  and  editorials  the  spirit  of  cooperative  under- 
standing so  necessary  to  foreign  trade  relationships. 

As  to  suggestions  concerning  advertising  in  periodicals 
for  the  purpose  of  fostering  foreign  commerce,  a  few  hints 
may  be  made. 

1.  The  advertising  campaign  must  be  reasonably  continuous. 
Advertising  in  foreign  periodicals  is  subject  to  the  same  laws 
as  advertising  at  home,  in  many  respects,  a  definite  policy  being 
required, 

2.  The  advertisement  should  be  written  in  the  native  tongue 
and  not  translated  from  another  language,  especially  from  English 
where  the  idioms  are  often  difficult  of  interpretation.  It  must 
be  remembered  that  "selling"  Spanish  or  "selling"  Japanese  is 
quite  a  different  thing  from  "correct"  Spanish  or  "correct" 
Japanese.  The  right  appeal  can  usually  be  obtained  only  by 
having  the  advertisement  written  by  a  native  of  the  country 
where  goods  are  to  be  sold  or  by  a  competent  advertising  agent. 

3.  Each  country  should  be  handled  by  itself.    Rarely  will  the 


244       FOREIGN  TRADE  MARKETS  AND  METHODS 

same  advertisement  copy  meet  the  needs  of  a  number  of  different 
nations.  It  must  be  remembered  that  there  are  eighty-seven 
countries  in  the  world  and  no  two  of  them  are  alike. 

4.  The  choice  of  the  media  for  advertising  abroad  should 
be  given  as  great  care  and  consideration  as  that  given  to  domestic 
campaigns  to  reach  the  American  market. 

5,  Make  sure  that  you  are  not  advertising  an  article  in  a 
foreign  country  where  it  will  be  impossible  or  almost  impossible 
to  sell  it.  For  example,  a  certain  American  advertiser  spent  a 
large  amount  of  money  attempting  to  sell  the  English  trade  a 
syrup  for  pancakes,  discovering  too  late  that  pancakes  were  not 
on  the  English  bill  of  fare.  Likewise,  an  American  seller  would 
not  try  to  dispose  of  breakfast  cereal  in  France  unless  he  first 
established  a  comprehensive  educational  campaign.  In  some 
countries  the  servant  classes  are  so  illiterate  that  advertising 
campaigns  for  such  articles  as  laundry  soap  or  washing  machines 
would  not  have  an  immediate  effect.  Knowledge  of  the  country 
is  in  every  case  essential,  'Study  the  market'  is  the  slogan  for 
foreign  trade  advertising.  A  certain  advertiser  persistently 
advertised  in  Japan  his  lawn  mower,  using  follow-up  letters, 
etc.,  not  realizing  that  there  is  hardly  a  lawn  to  be  found  in  the 
'Sunrise  Kingdom.'  An  American  went  down  to  Argentina  to 
try  to  revolutionize  the  Argentinos  by  advertising  a  brand  of 
chewing  gum.  Nobody  knew  what  the  words  meant  and  the 
Argentinos  couldn't  pronounce  the  words  'chewing  gum.'  After 
considerable  advertising  in  street  cars,  etc.,  the  Argentinos  were 
led  to  believe  that  chewing  gum  was"  a  'sure  cure  for  smoking,* 
at  which  announcement  the  Argentino  would  not  touch  the 
article,  thinking  it  might  make  him  want  to  stop  smoking 
cigarettes. 

The  following  advice  given  by  a  prominent  manager  of 
a  foreign  trade  department  of  advertising  is  worthy  of 
notice : 

Advertising  is  not  'the  royal  road  to  success'  in  the  general 
acceptance  of  that  sentiment.  Advertising  alone  will  not  sell 
goods.  The  expenditure  of  a  certain  fixed  sum  of  money  in 
and  of  itself  is  no  guarantee  of  large  sales  or  repeat  orders. 
There  is  no  magic  wand  of  any  kind  which  the  American  manu- 
facturers can  wave  over  the  Latin  American  or  any  other  foreign 


NEWSPAPERS  AS  FOREIGN  TRADE  BUILDERS     245 

field  and  obtain  immediate  success  as  the  result.  Instead,  you 
■will  find  that  the  same  bases  which  have  been  employed  in 
building  up  domestic  trade  are  equally  necessary  in  establishing 
foreign  relations  with  such  allowances  as  are  called  for  by  dif- 
ferences in  temperament,  race  and  climatic  conditions.  No 
merchant  or  manufacturer  should  seriously  consider  entering  any 
foreign  field  without  first  having  made  a  study  of  the  country, 
its  people  and  the  things  they  buy. 

As  to  definite  kinds  of  periodicals  to  use  for  foreign 
trade  advertising  the  following  suggestions  may  be  of  use : 
Saturday  Evening  Post,  Literary  Digest,  New  York  Times, 
System,  The  Christian,  Science  Monitor  and  the  New  York 
Herald,  all  of  which  papers  and  periodicals  have  been  read 
by  the  writer  in  foreign  homes  and  many  clubs  of  the 
chief  cities  of  the  Orient,  Europe,  Africa  and  Latin 
America.  The  advertising  in  these  widely  read  American 
publications  is  quite  likely  to  be  noticed  by  business  firms 
in  different  parts  of  the  world  and  this  has  been  a  very 
real  means  of  starting  first  inquiries  concerning  American 
products. 

One  of  the  first  mediums  to  be  considered  is  that  of 
export  trade  papers  which  are  becoming  important  inter- 
national trade  media.  These  export  publications  are  looked 
upon  by  many  business  men  abroad  as  catalogues  of  Ameri- 
can products  in  merchandise  and  have  been  one  of  the 
greatest  single  factors  of  private  enterprise  in  bringing 
together  more  closely  in  the  commercial  interests,  not  only 
the  two  Americas,  but,  our  country  and  more  distant 
lands. 

In  selecting  the  magazines  or  periodicals  generally  for 
advertising  in  foreign  lands  it  is  necessary  to  have  local 
knowledge  concerning  such  subjects  as  the  conditions  of 
the  market,  population,  its  buying  power  and  the  kind  of 
publications  which  are  most  naturally  adaptable  to  the 
traits  and  tastes  of  the  people  one  wishes  to  impress. 

In  Argentina,  for  example,  there  is  probably  a  greater 
variety  of  good  publications  than  in  any  other  one  Latin 
American  country.     It  must  be  remembered,  here  as  in 


246       FOREIGN  TRADE  MARKETS  AND  METHODS 

other  republics  to  the  south  of  the  United  States,  that 
newspapers  take  the  place  very  largely  of  magazines,  and 
there  are  many  influential  and  well-edited  newspapers 
throughout  Latin  America  which  carry  great  authority  with 
the  people.  In  Buenos  Aires  the  prominent  dailies  like 
La  Prensa,  La  Nacion,  and  La  Razon,  carry  a  large  amount 
of  local  advertising  while  the  first  two  mentioned  contain 
many  American  advertisements.  The  high-class  Argentine 
weekly.  Cava  y  Careta^  has  a  large  circulation  up  and  down 
the  coast  as  well  as  in  the  interior  of  the  country,  and  in  a 
recent  issue  carried  50  pages  of  advertising,  9%  pages 
representing  products  of  15  American  advertisers.  There 
is  also  the  artistic  monthly  called  Plus  Ultra,  reaching  the 
best  classes  of  society  and  in  its  general  make-up  compares 
artistically  with  magazines  published  in  the  United  States. 

In  the  Brazilian  Republic  there  are  important  dailies 
such  as  Journal  do  Commercio,  Correio  de  Manha,  0  Impar- 
cial,  together  with  the  illustrated  and  popular  weeklies 
Fon  Fon,  0  Malho,  etc.,  all  of  which  circulate  widely 
through  the  whole  Republic.  The  Brazilian  newspapers 
carry  many  literary  articles  which  would  naturally  appear 
in  the  United  States  in  our  better  magazines.  The  news- 
papers here  as  in  Argentina  are  institutions  of  the  country 
and  are  regarded  with  high  respect. 

Among  the  important  publications  in  Chile  are  the 
dailies  El  Mercurio  of  Santiago,  and  El  Sur  of  Concepcion. 
There  is  also  the  illustrated  weekly  review  Zig  Zag,  which 
circulates  widely  on  the  West  Coast. 

In  going  up  the  coast  to  Peru  the  dailies  assume  even  a 
more  important  position  and  carry  the  chief  advertising 
messages.  Among  the  reliable  newspapers  are  El  Com- 
mercio, of  Lima,  and  La  Prensa,  of  the  same  city,  which 
have  a  very  large  and  important  following  in  both  business 
and  social  circles. 

The  West  Coast  Leader,  a  paper  published  in  English 
at  Lima,  Peru,  circulates  quite  widely  along  the  West 
Coast,  and  is  a  well-edited  and  worth-while  publication. 

The  Review  of  The  River  Plate,  a  British  weekly  paper 


NEWSPAPERS  AS  FOREIGN  TRADE  BUILDERS     247 

published  for  the  most  part  in  English  in  Buenos  Aires, 
carries  in  addition  to  British  copy  considerable  advertising 
of  American  firms. 

World  markets,  however,  cannot  be  exhausted  without 
a  more  or  less  wide  knowledge  on  the  part  of  some  one 
connected  with  the  firm  relative  to  media  in  all  the  large 
foreign  countries.  (We  are  indebted  for  certain  of  this 
information  to  Howard  G.  Winne,  manager,  Johnston 
Overseas  Service.) 

In  Australasia  the  following  dailies  have  been  suggested 
as  worthy  media  for  attention:  Melbourne  Herald,  MeU 
hourne  Age,  Sydney  Morning  Herald,  Brisbane  Courier, 
'Wellington  Post,  The  Press  of  Christehurch,  N.  Z.,  and 
other  worthy  dailies  throughout  the  commonwealths.  In 
the  class  of  important  weeklies  of  Australasia  may  be 
named  the  Sydney  Bulletin,  The  Australasian,  The  Auck- 
land Weekly  News,  and  The  Weekly  Press,  Christehurch, 
,N.  Z.,  etc.  Among  the  trade  papers  of  this  section  we 
would  suggest  such  reviews  as  Australasian  Hardware  and 
Machinery,  Chemist  and  Druggist  of  Australasia,  Chemical 
Engineering  and  Mining  Review,  Australasian  Leather 
Trades  Review  and  substantial  motor  trade  papers. 

In  South  Africa  the  prominent  dailies  to  be  mentioned 
which  have  a  wide  influence  are  the  following:  Cape 
Argus  of  Cape  Town,  with  its  valued  weekly  edition,  The 
Week  End  Cape  Argus,  the  Eastern  Province  Herald  of 
Port  Elizabeth,  and  The  Star  of  Johannesburg.  The  Sun- 
day Times  of  Johannesburg  wields  a  powerful  influence 
and  is  recognized  as  the  most  important  Sunday  issue  of 
that  district. 

Trade  papers  which  will  be  found  satisfactory  in  South 
Africa  and  which  are  read  by  the  chief  commercial  and 
industrial  people  are:  Industrial  South  Africa,  South 
Africa  Mining  Journal,  Motoring  in  South  Africa,  South 
African  Motorist  and  Farmers'  Weekly. 

In  the  Far  East  both  English  and  native  periodicals 
should  be  noted,  since  the  English  dailies  and  trade  reviews 
are  required  to  reach  important  traders  and  foreign  buyers 


248       FOREIGN  TRADE  MARKETS  AND  METHODS 

despite  the  fact  that  they  ere  not  generally  read  by  the 
native  population. 

The  Far  East  and  Eastern  Commerce  published  in  Japan, 
carry  a  message  in  English  and  Industrial  Japan  presents 
the  story  of  selling  in  the  language  of  the  country. 

In  China  we  have  Millard's  Review,  Industrial  China 
and  Far  Eastern  Review  all  of  which  make  a  substantial 
contribution  to  the  trade  press,  while  dailies  in  the  English 
language  have  been  proven  good  media,  and  among  these 
are:  The  Pekin  Daily  News,  The  China  Press,  North 
Chinu  Daily  News  and  the  South  China  Morning  Post. 
In  China,  as  in  Japan,  firms  having  local  branch  houses 
situated  in  the  larger  cities  would  naturally  depend  upon 
their  local  managers  to  select  such  periodicals  in  the  native 
language  as  would  be  the  most  useful  to  the  particular 
product  which  they  wish  to  advertise. 

In  India  there  are  dailies  and  weeklies  well  edited,  such 
as  the  Times  of  India,  Bombay ;  The  Statesman,  Calcutta ; 
Capital,  Calcutta;  Madras  Mail,  Madras,  and  trade  papers 
of  the  character  of  the  Indian  Textile  Journal. 

It  may  be  further  noted  that  throughout  the  English 
reading  colonies  of  Great  Britain  one  finds  the  Illustrated 
London  News,  The  Sphere,  The  Sketch  and  the  Graphic. 
These  papers  are  very  popular  and  should  not  be  over- 
looked among  advertisers  who  wish  to  reach  by  pictures 
as  well  as  by  printed  word  the  constituencies  of  such  coun- 
tries as  India,  Ceylon,  Burma,  South  China,  Egypt  and 
South  Africa. 

French  publications  are  important  for  study  by  manu- 
facturers, since  France  has  become  such  a  large  buyer  of 
American  specialties  of  all  kinds.  The  trade  and  technical 
reviews  are  receiving  increasingly  large  support  on  the 
part  of  American  advertisers.  Among  the  leading  dailies 
in  France  may  be  mentioned  Le  Petit  Parisien,  Le  Matin, 
Le  Temps,  Le  Journal  and  L'Iniransigeant.  Among  the 
technical  and  trade  journals  are  such  reviews  as  L'Usine, 
L'Outillage,  Sciences  et  Armees.  In  one  of  the  compara- 
tively recent  issues  of  the  L'Usine  there  were  105  pages 


NEWSPAPERS  AS  FOREIGN  TRADE  BUILDERS     249 

of  advertising  with  five  whole  pages  given  up  to  the  adver- 
tising of  13  American  manufacturers.  In  France  there  is 
also  a  large  and  good  selection  of  engineering  papers,  hard- 
ware and  machinery  reviews,  factory  and  plant  publica- 
tions and  papers  on  lumber  and  leather  trades,  in  all  of 
which  the  rates  are  much  lower  than  they  are  in  the  United 
States. 

In  Scandinavia  there  is  a  well  developed  press  with 
dailies  and  weeklies  reaching  the  commercial  and  industrial 
interests.  Among  those  of  note  may  be  mentioned  Affars- 
varlden,  Electroteknisk  Tidskrift,  Ingenir,  etc.,  correspond- 
ing to  our  American  issues  of  Manufacturers'  Record, 
Electrical  World,  American  Machinist  and  papers  of  a 
similar  character. 

If  the  appeal  has  a  more  general  character,  and  dailies 
are  required,  the  highly  regarded  Aftenposten,  Christiania ; 
Politiken  and  Borsen,  Copenhagen;  and  Dagens  Nyheter, 
Stockholm,  are  available. 

The  American  manufacturer  who  is  really  in  earnest 
about  foreign  trade  will  find  that  a  study  of  the  large 
variety  of  the  media  for  presenting  his  products  in  foreign 
lands  will  furnish  him  not  only  with  valuable  money 
returns  when  properly  studied,  but  also  will  stimulate  his 
mind  and  imagination  to  a  new  and  wide  interest  in  the 
various  nations,  which  are  being  bound  to  us  to-day  more 
closely  than  ever  before  in  vital  commercial  union. 


CHAPTER  XV 

DIPLOMATIC  AND  CONSULAR  SERVICE 

And  statesmen  at  her  council  met, 
Who  knew  the  seasons,  when  to  take 
Occasion  by  the  hand,  and  make 
The  bounds  of  freedom  wider  yet. 

—Tennyson. 

In  these  days  when  the  eyes  of  the  American  exporter 
and  manufacturer  are  lifted  to  distant  horizons,  the  activi- 
ties of  the  American  Consul  and  diplomatic  officers  in 
general  in  foreign  lands  become  increasingly  important. 
Among  the  men  who  are  serving  the  United  States  abroad 
there  are  few  who  have  the  opportunity  of  wielding  greater 
power  or  influence  on  behalf  of  their  country  than  the  diplo- 
matic and  consular  representatives.  It  has  been  my  privilege 
to  know  many  of  these  men  in  different  countries,  and  on 
the  whole  I  have  come  to  respect  them  highly,  both  for  their 
ideals  and  the  manner  in  which  they  are  striving  to  attain 
them,  frequently  under  arduous  and  difficult  circumstances. 

The  functions  of  ambassadors  and  ministers  of  the  diplo- 
matic corps  are  practically  identical  save  that  an  ambas- 
sador is  the  representative  of  the  President,  with  power 
to  act,  while  the  minister  is  the  agent  of  the  President,  who 
acts  only  on  instructions.  Ministers  hold  the  position  of 
head  official  of  legations  abroad  in  those  countries  which 
are  considered  in  the  group  of  lesser  powers,  while  official 
title  of  ambassador  is  conferred  upon  the  ranking  diplo- 
matists to  the  greater  powers,  such  as  England,  France, 
Italy,  Japan,  etc.  There  are  eleven  countries  of  major 
importance  to  which  the  United  States  sends  ambassadors 
and  the  government  is  represented  by  about  thirty  ministers 
in  foreign  countries.  Ambassadors  receive  $17,500  for  their 
services  and  ministers  about  $10,000  per  year. 

250 


DIPLOMATIC  AND  CONSULAR  SERVICE  251 

While  the  greater  part  of  the  effort  and  time  of  our 
diplomatic  representatives  is  directed  toward  preserving 
amicable  political  relationships  between  the  country  wherein 
they  are  established  and  the  United  States,  their  influence 
has  a  salutary  effect  upon  our  foreign  commerce  in  pro- 
portion to  their  knowledge,  wisdom  and  foresight.  It  is  part 
of  their  duty  to  negotiate  treaties  with  foreign  powers  tend- 
ing to  assure  equal  opportunity  in  promoting  exchanges 
of  commodities  unhampered  by  unfair  practices  or  unjust 
discrimination.  They  are  watchful  to  anticipate  the  more 
important  and  far-reaching  political  measures  and  policies 
of  foreign  countries  which  draw  a  discriminatory  line 
between  the  United  States  and  other  nationals  in  relation 
to  the  just  and  common  rights  of  both  as  affects  commerce, 
as  weU  as  to  convince  the  foreign  government  of  the  inad- 
visability  of  such  action. 

Recently  the  Chamber  of  Deputies  of  Holland  passed  a 
law  practically  barring  American  business  interests  from 
participating  in  the  development  of  the  rich  Djambi  oil 
fields  in  the  island  of  Sumatra  of  the  Dutch  East  Indies. 
The  law  granted  a  concession  virtually  amounting  to 
monopoly  of  business  interests  to  other  nations  with  whom 
we  should  enjoy  equal  opportunities  and  advantages  in 
this  development  work.  The  Department  of  State,  through 
our  minister  to  Holland,  protested  the  action  as  unjust 
discrimination  and  it  is  the  task  of  our  diplomatic  official 
to  work  toward  a  solution  of  the  difficulty. 

After  a  world  upheaval  such  as  has  been  brought  about 
by  the  war  a  series  of  new  conditions  demand  a  readjust- 
ment of  existing  treaties  which  often  are  found  ineffective 
due  to  the  changed  situation.  It  becomes  the  duty  of  our 
ambassadors  and  ministers  to  effect  such  changes  in  policy 
as  is  deemed  advisable  to  secure  the  greatest  facility  and 
justice  in  our  trade  relationships. 

It  is  also  in  the  scope  of  the  diplomatic  official's  duty 
to  negotiate  and  effect  the  terms  under  which  foreign  loans 
shall  be  consummated.  This  was  a  specially  vital  activity 
during  the  war  time,  when  the  allied  governments  borrowed 


252       FOREIGN  TRADE  MARKETS  AND  METHODS 

from  the  United  States  some  $13,000,000,000  with  which  to 
help  finance  their  war  operations.  American  industry  and 
foreign  commerce  were  greatly  quickened  and  stimulated 
as  a  result  since  these  loans  made  possible  vast  purchases 
by  Great  Britain,  France,  Belgium  and  Italy  in  America, 
of  materials  that  were  desperately  needed. 

Another  important  duty  of  our  ministers  abroad  is  to 
arrange  for  the  purchase  of  islands  or  other  foreign  govern- 
ment lands  or  possessions  in  the  acquisition  of  which  there 
is  particular  value  to  the  United  States.  The  treaty  which 
transferred  the  Virgin  Islands  in  the  West  Indies  from 
the  sovereignty  of  Denmark  to  our  jurisdiction  is  an 
important  example.  The  port  of  St.  Thomas  is  a  strategic 
coaling  station  for  our  merchant  marine  and  the  commerce 
with  these  islands  has  been  greatly  enhanced  by  reason  of 
the  purchase,  which  was  negotiated  by  our  former  minister 
to  Denmark,  Dr.  Maurice  Francis  Egan. 

The  work  of  the  American  consul  cannot  be  considered 
entirely  by  itself;  it  is  intimately  associated  and  recipro- 
cally related  to  the  attitude  and  activity  of  the  American 
exporter  and  merchant. 

Edward  J.  Norton,  one  of  our  consular  agents  having 
wide  experience  in  both  the  Far  East  and  South  America, 
writes  as  follows: 

The  commercial  work  of  the  American  Consular  Service  is 
directed  towards  helping  the  exporter  help  himself  to  foreign 
trade.  The  consuls  are  expected  to  inform  the  exporter  what 
products  sell  or  might  sell  in  the  world's  market;  about  the 
competition  that  exists,  and  how  to  meet  it;  suggest  a  means 
of  getting  into  these  markets;  how  to  handle  orders  and  how  to 
hold  trade.  In  other  words,  the  function  of  the  consul  is  to 
analyze  the  foreign  market. 

Our  Consular  Service  is  now  so  organized  and  developed  that 
the  exporter  at  home  wishing  to  plan  a  foreign  market  selling 
campaign,  and  facing  possible  purchasers  widely  distributed 
geographically  and  with  equally  wide  extremes  of  bujdng  power 
and  needs,  can — by  going  about  it  in  the  right  way — get  nearly 
all  the  information  he  requires  about  trade  opportunities  through 
the  consul. 


DIPLOMATIC  AND  CONSULAR  SERVICE  253 

However,  the  assistance  rendered  by  the  Consular  Service  to 
the  exporter  is  generally  well  known.  On  the  other  hand,  very 
little  has  been  said  about  the  assistance  the  exporter  can  render 
to  the  consul. 

In  this  connection  Mr.  Norton  points  out  that  a  consul 
Would  be  greatly  aided  if  the  American  exporter  would 
vrrite  him  definitely  concerning  certain  products  which  he 
would  like  to  have  him  investigate  as  to  markets  in  his 
particular  section.  He  states,  with  good  reason,  that  many 
of  the  requests  which  come  to  consuls  are  so  indefinite  and 
vague  that  the  man  of  the  Consular  Service  is  at  sea  to 
know  the  particular  thing  about  which  the  American  manu- 
facturer wishes  to  be  informed.  He  also  states  that  most 
of  the  Consulates  are  glad  to  keep  a  file  of  the  catalogues 
and  price-lists  of  American  manufacturers  and  exporters 
for  the  information  of  people  wishing  to  do  business  with 
American  firms.  By  sending  these  catalogues  directly  to 
the  consul,  the  manufacturer  not  only  serves  himself,  but 
expedites  business,  making  it  possible  for  the  prospective 
buyer  in  foreign  lands  to  secure  his  information  through 
the  guidance  of  a  consul  as  a  representative  of  American 
business. 

The  work  of  the  American  consul  is  not  accurately  under- 
stood even  by  many  exporters  who  would  be  supposed  to 
have  a  knowledge  of  the  services  of  these  important  officers. 

The  ineffectiveness  of  the  consul  has  not  been  due 
entirely  to  unwise  appointments  although  certain  of  the 
consular  appointments  in  the  past  have  not  been  wise  or 
satisfactory.  It  is  easy  to  criticize  an  individual  officially, 
especially  if  one  does  not  have  full  knowledge  of  the  con- 
ception of  his  office.  It  is  natural  that  people  should  be 
more  ready  to  seek  any  faults  concerning  our  consular 
service  than  that  they  should  be  ready  with  praise  for  these 
men,  who  in  many  cases  are  exiles  for  life  from  their  native 
land,  and  are  rendering  most  devoted  service  to  the  country 
to  which  they  are  attached. 

The  main  business  of  the  American  consul  is  to  develop 
and   maintain   commercial   and   trade    relations   between 


254       FOREIGN  TRADE  MARKETS  AND  METHODS 

Americans  at  home  and  the  business  people  of  foreign 
countries.  He  owes  a  responsibility  to  the  State  Depart- 
ment involving  frequent  and  detailed  reports.  He  must 
keep  an  account  of  shipping  and  port  statistics,  registra- 
tion of  American  citizens,  passports  to  be  vised,  together 
with  other  political  and  statistical  reports.  The  consul 
also  has  certain  jurisdictional  work,  settling  the  estates  of 
persons  dying  abroad,  while  there  arises  often  certain  inter- 
cessory services  on  behalf  of  the  American  colony  in  coun- 
tries where  there  are  capitulations  or  extra-territorial  rights. 

The  Treasury  Department  also  demands  certain  duties 
from  the  consul  such  as  transfer  of  all  the  United  States 
bonds  abroad,  income  tax  business,  also  demographic  statis- 
tics which  must  be  secured  and  sent  every  week  to  the 
Department  at  Washington,  together  with  bills  of  health 
for  ships. 

The  Department  of  Commerce  requires  also  from  the 
consul  the  following  duties : 

1.  To  legalize  all  transfer  of  shipping. 

2.  To  survey  all  protested  cargo  and  protested  shipments  of 
merchandise  and  damaged  ships. 

3.  To  attend  to  the  discharge  and  enrollment  of  every  American 
seaman  in  his  port. 

4.  To  act  as  intermediary  between  ships'  captains  and  port 
authorities. 

5.  To  send  American  sailors  to  hospitals  when  it  is  required, 
and  also  to  see  to  their  burial  and  to  the  settlement  of 
their  estates. 

6.  To  write  regular  commercial  reports. 

7.  To  settle  all  disputes  between  masters  and  mariners. 

No  little  part  of  the  excellent  service  rendered  by  the 
Department  of  Commerce  to  manufacturers  and  customers 
in  their  various  reports  is  due  to  the  work  of  the  American 
consul  in  gathering  statistical  knowledge  and  data. 

The  consul  is  also  connected  with  the  Department  of 
Navy  as  the  representative  of  the  Bureau  of  Hydrography 
and  he  is  expected  to  keep  in  line  with  the  changes  of 


DIPLOMATIC  AND  CONSULAR  SERVICE  255 

lighthouses,  being  held  responsible,  in  part  at  least,  for  any 
wrecks  that  occur  by  reason  of  changes  in  signals,  lights, 
etc.  The  receiving  of  warships  in  his  port  with  proper 
ceremony  is  also  part  of  the  consul's  duty,  as  well  as 
purchasing  of  cargo  and  oil  for  these  ships  if  it  is  so 
desired. 

Reports  are  sent  to  the  Department  of  Agriculture  rela- 
tive to  crops  and  the  consul  acts  as  agent  for  the  sending 
of  grain  and  fruit  seeds.  He  is  also  the  deputy  officer  of 
customs  and  must  legalize  invoices  at  the  point  of  origin, 
unless  such  invoices  are  less  than  $100.  He  is  responsible 
for  itemizing  invoices  from  which  import  statistics  of  the 
United  States  are  made  up,  and  is  thus  required  to  know 
the  wholesale  prices  and  hold  a  check  upon  any  articles 
undervalued. 

As  agent  of  the  Dead  Letter  Office  of  the  United  States 
the  consul  holds  responsibility  to  the  Post  Office  Depart- 
ment and  he  also  receives  mail  of  American  citizens  at  the 
consular  office,  forwarding  it  when  necessary.  Secret 
service  men  of  the  Army  and  Navy  are  aided  by  the  consul 
as  well  as  traveling  officers  of  the  Government,  not  to  speak 
of  the  varied  duties  which  he  performs  for  tourists.  His 
correspondence  is  considerable  and  he  represents  the  courts 
of  the  United  States  for  the  Department  of  Justice,  having 
notarial  responsibility  and  being  a  Commissioner  of  Deeds. 
Commercial  treaties  of  course  must  be  known  by  him,  and 
in  fact  the  consular  office  is  an  all-around  clearing  house 
for  nearly  every  branch  of  the  home  government. 

For  all  these  duties  the  consular  office  is  still  poorly 
paid,  since  he  is  obliged  to  be  under  an  expense  abroad 
greater  than  would  be  the  case  if  he  were  living  at  home. 
Rarely  do  consuls  save  money  and  if  his  appointment  is 
lost  he  finds  it  difficult  to  return  to  the  United  States  and 
procure  a  position  along  the  line  of  his  most  effective 
qualifications.  There  has  been  some  talk  of  consular  pen- 
sions which  would  be  a  step  in  the  right  direction.  It 
cannot  be  too  strongly  urged  that  a  civil  service  plan  for 
consular  posts  should  be  adhered  to  in  order  that  the  consul 


256       FOREIGN  TRADE  MARKETS  AND  METHODS 

and  his  subordinates  may  feel  that  good  work  will  be 
appreciated  and  rewarded  by  permanent  consular  occupa- 
tion. Once  a  man  has  entered  this  service,  if  he  is  in  any 
wise  a  student  of  conditions  and  peoples,  he  finds  the  work 
both  fascinating  and  vitally  important.  "We  know  many 
men  who  are  remaining  in  this  service  at  financial  sacrifice, 
simply  because  the  work  is  both  congenial  and  alluring, 
as  a  means  of  serving  their  country  in  a  time  of  great 
opportunity. 

The  war  has  caused  sujch  a  widespread  upheaval,  not  only 
in  political  but  also  in  commercial  affairs  throughout  the 
world,  that  reconstruction  is  necessary  in  the  diplomatic 
and  consular  services  as  in  virtually  all  other  departments 
of  our  national  life. 

While  the  business  man  in  many  instances  in  the  past 
has  become  somewhat  discouraged  as  regards  the  possibility 
of  securing  in  various  foreign  countries,  uniformly  at  least, 
Government  representatives  and  officials,  who  by  training 
and  personality  are  capable  of  truly  representing  the 
country  and  assisting  in  trade,  it  would  seem  in  this  new 
era  of  industrial  and  international  relationships  that 
politics  should  be  adjourned  more  and  more  and  the  eco- 
nomic commercial  progress  of  the  United  States  reempha- 
sized  in  the  appointment  of  our  national  representatives 
abroad.  These  representatives  should  be  charged  with  the 
high  duty  of  real  leadership  on  behalf  of  their  country  in 
the  great  competitive  industrial  contests  for  America's 
rightful  commerce  and  economic  expansion. 

The  great  gulf  between  the  diplomatic  and  consular 
bodies  should  be  bridged  as  far  as  possible,  and  the  men 
appointed  directly  for  trade  responsibility  should  be  given 
a  new  and  dignified  status  in  the  countries  to  which  they 
are  attached.  Doubtless,  it  would  be  impossible  or  unwise 
to  follow  the  law  on  the  statute  books  in  Italy  calling  for 
an  interchange  of  officers  between  consular  and  diplomatic 
departments;  but  for  the  sake  of  the  vital  necessity  for 
furthering  national  economics  abroad,  at  a  time  when  every 
functionary  should  be  keenly  alert  in  loyalty  to  the  great 


DIPLOMATIC  AND  CONSULAR  SERVICE  257 

foreign  trade  expansion  of  the  United  States,  thonght  and 
careful  planning  should  be  given  to  team  play  between  our 
foreign  representatives.  These  men  have  tremendous  pos- 
sibilities in  their  hands;  the  diplomat,  the  consul,  the 
commercial  attache,  the  trade  commissioner,  should  be 
selected  from  our  most  successful  and  experienced  men 
wherever  possible,  and  they  should  not  only  be  given 
salaries  adequate  to  their  talents  and  tasks,  but  they  should 
be  relieved  of  mere  office  routine  duties  in  order  that  they 
may  have  time  to  meet  the  new  responsibilities  involved  in 
racial  understanding  and  commercial  interpretation. 

It  required  the  war  and  the  extensive  system  of  German 
propaganda  to  awaken  our  country,  as  well  as  the  other 
Allied  nations,  to  the  need  of  publicity  as  a  means  of 
conserving  political  and  economic  life.  The  conviction  is 
growing  that  publicity  is  not  only  a  necessity  to  save  demo- 
cratic institutions,  but  it  is  a  legitimate  instrument  of  trade 
to  be  used  in  a  world-wide  manner.  If  Great  Britain  found 
the  necessity  of  appointing  a  minister  of  propaganda  in 
war  time  such  as  Lord  Northcliffe,  France  such  a  man  as 
Andrew  Tardieu,  and  Italy  a  like  representative  for  pro- 
moting national  and  economic  requirements,  it  should  be  a 
signal  for  the  United  States  to  consider  the  permanent  use 
for  publicity  purposes  of  diplomatic  representatives  of  high 
caliber  who  would  travel  through  various  countries,  not  on 
social  but  industrial  and  propaganda  missions.  We  have 
had  quite  enough  of  social  junkets,  commissions  to  South 
America  and  other  lands,  whose  members  have  spent  their 
time  in  entertainments  and  receptions  arranged  by  the 
lands  visited,  through  sometimes  an  overdue  sense  of 
courteous  hospitality.  The  present  need  calls  for  men 
accredited  by  our  Government  or  reputable  commercial 
bodies  of  high  standing  in  finance,  insurance,  advertising, 
manufacturing  and  merchandise,  who  will  be  more  or  less 
permanently  abroad,  and  closely  in  touch  with  our  home 
markets  to  suggest  directly  and  practically  what  should 
be  done  to  foster  an  expanding  American  commerce  with 
all  the  world. 


258       FOREIGN  TRADE  MARKETS  AND  METHODS 

The  time  has  passed  when  Americans  look  despair- 
ingly upon  the  printed  page  as  a  means  of  publicity  in 
foreign  activities.  Our  national  competitors  are  quite  ready 
to  catch  up  our  weaknesses  and  our  failures  in  labor  or  in 
political  matters  and  play  them  up  out  of  all  proportion 
in  order  to  influence  adversely  other  nationals  against  our 
commerce.  It  is  encouraging  to  note  that  with  such  coun- 
tries as  South  America  particularly,  new  press  agencies 
are  being  formed  by  which  the  people  of  these  southern 
republics  are  realizing  more  and  more  the  true  proportion 
of  affairs  in  our  national  and  commercial  life.  But  sys- 
tematic and  dignified  publicity — diplomatic  cooperation 
between  our  agents  abroad — requires  leadership  of  a  high 
order.  It  should  not  be  left  to  chance  or  to  half-informed 
journalists  or  scheming  politicians.  There  is  a  new  require- 
ment in  this  field  for  representatives  of  trade  as  well  as  of 
statecraft  whose  knowledge  will  measure  to  their  gentle- 
manhood  and  their  efliciency.  Let  us  keep  our  second-rate 
men  at  home.  The  foreign  field  requires  men  best  repre- 
sentative of  brains  and  experience.  "We  would  suggest  a 
new  course  in  every  college  curriculum  of  our  land  with 
a  caption  over  the  door: 

How  TO  Prepare  Diplomats  and  Consuls 
FOR  American  Foreign  Trade! 


CHAPTER  XVI 

MUTUAL  MARKETS  BETWEEN  THE  UNITED  STATES 
AND  JAPAN 

The  character  of  Japanese  imports  into  the  United  States 
indicates  that  American  manufacturers  need  not  fear  destructive 
competition  from  Japan,  while  exports  from  the  United  States 
to  Japan  are  of  suflSeient  importance  to  American  producers  to 
render  desirable  the  maintenance  of  satisfactory  mutual  trade 
relations  between  the  two  countries. — Commerce  Monthly. 

From  the  time  when  Japan  achieved  her  military  victory 
over  Russia,  real  Japanese  industry  and  progress  took 
on  a  new  meaning  not  only  for  the  Orient  but  for  the 
entire  world.  "We  chanced  to  be  in  the  East  shortly  after 
Japan's  war  with  Russia  closed,  and  it  was  impressive  to 
see  the  way  in  which  this  victory  of  an  Oriental  over  a 
European  nation  thrilled  the  entire  Eastern  world.  The 
modernization  of  Japan  continued  steadily  up  to  the  time 
of  the  European  war  which  marked  a  new  epoch  in  her 
progress  and  outspreading  power.  Not  only  her  mili- 
tary but  her  shipping  and  commercial  interests  were 
greatly  advanced  by  reason  of  the  exigencies  of  the  great 
war  and  there  is  no  doubt  that  her  trade  ambitions  rela- 
tive to  Siberia  and  China  have  been  vastly  increased 
recently. 

It  has  become  more  and  more  a  realized  fact  that  Japan 
is  dependent  upon  foreign  trade  for  the  maintenance  of 
her  modern  national  and  economic  life.  Her  area  (exclu- 
sive of  Korea  and  Formosa)  is  about  one-half  the  area  of 
that  part  of  the  United  States  north  of  the  Ohio  and  the 
Potomac  rivers  and  east  of  the  Mississippi,  while  her  popu- 

259 


260       FOREIGN  TRADE  MARKETS  AND  METHODS 

lation  at  the  close  of  1918  was  57,150,000  or  about  one- 
tenth  greater  than  the  American  area  cited.  The  resources 
of  Japanese  soil  are  not  adequate  for  the  maintenance  of 
such  a  large  population  and  the  importation  of  raw 
materials  for  reexport  in  manufactured  form  is  absolutely 
essential  in  order  to  give  employment  to  this  closely  packed 
population.  In  Japan  only  16  per  cent  of  the  land  is 
arable  and  there  is  only  about  14  of  ^^  acre  to  a 
person  for  cultivation.  Realizing  this  Japan  has  devoted 
particular  attention  to  her  export  and  carrying  trade,  to 
her  manufactures  and  her  industries,  with  the  result  that 
in  almost  every  nation  of  the  world  to-day  Japanese  busi- 
ness men  and  merchants  may  be  found  competing  with  no 
mean  success  with  the  western  nations  for  the  expanding 
business  of  such  trade  countries  as  South  America,  China, 
South  Africa  and  the  East  Indies. 

Among  the  problems  which  the  Sunrise  Elingdom  has 
before  her  at  present  is  that  of  bringing  unity  between 
the  militaristic  and  more  democratic  sentiment  of  the 
country.  Undoubtedly  the  influence  of  Germany  from  a 
military  point'  of  view  has  been  great  in  Japan  and  this 
party  evidently  is  placing  certain  obstacles  in  the  way  of 
peaceful  trade  with  the  rest  of  the  world.  Thomas  W. 
Lamont,  of  J.  P.  Morgan  &  Company,  who  visited  the  Far 
East  to  confer  with  representative  bankers  of  Great 
Britain,  France  and  Japan,  to  form  in  that  section  a  con- 
sortium for  the  economic  development  of  China  par- 
ticularly, spoke  on  his  return  before  the  American  Manu- 
facturers' Export  Association  at  the  Hotel  Pennsylvania 
regarding  Japan  and  the  United  States: 

Japan  is  commercially  to-day  under  the  handicap  of  the  so-called 
mihtary  party,  which  of  recent  years  has  been  so  strong  as 
almost  to  constitute  an  actual  super-government.  There  are  two 
schools  of  thought  in  Japan,  and  the  cleavage  is  a  deep  one. 
One  believes,  as  we  do  here  in  America,  that  a  nation's  develop- 
ment, to  be  sound  and  sure,  must  be  along  lines  of  peaceful 
trade  and  the  cultivation  of  good  will.  The  other  party  in 
Japan,  the  militarists,  have  a  different  philosophy.    They  believe 


MUTUAL  MARKETS— UNITED  STATES  AND  JAPAN  261 

in  a  mighty  army  and  navy.  They  are  sincerely  convinced  that 
Japan's  safety  and  future  lie  in  having  a  dominating  influence 
on  the  continent  of  Asia. 

Japan  would  welcome  American  capital  on  a  large  scale  to 
develop  her  own  industries.  She  has  a  limited  supply  of  coal 
and  is  anxious  to  develop  good  roads  and  construct  new  trolley 
lines.  The  United  States  will,  as  time  goes  on,  be  in  a  position 
to  supply  a  good  part  of  this  demand  but  at  the  present  time 
the  apparent  policy  of  Japan's  military  party  will  prevent  any 
American  cooperation  on  a  grand  scale. 

As  to  the  triumpli  of  liberalism  in  Japan  over  militarism 
there  are  some  w^ho  point  to  the  recent  agitation  for 
universal  suffrage  in  that  country  and  also  the  evidence 
of  a  conciliatory  policy  in  China  advocated  of  late  on  the 
part  of  Japan.  Popular  discussions  concerning  "democ- 
racy" and  the  suggestion  of  labor  reforms  have  also  been 
pointed  out  as  marks  or  signs  of  a  more  liberal  policy. 
There  has  been  also  a  reaction  in  the  country  against 
bureaucracy  due  to  the  failure  of  German  militarism. 
Nevertheless,  one  of  the  progressive  leaders,  Yukio  Ozaki, 
is  reported  to  have  declined  not  long  since  to  head  a  labor 
party  and  gives  to  labor  the  advice  of  getting  educated  as 
the  best  means  for  future  influence. 

As  a  matter  of  fact,  the  Japanese  or  Tokyo  Diet  is 
lacking  in  authority  to  control  Government  action  and  until 
this  body  is  given  greater  powers  and  influence  democracy 
and  liberal  policies  will  be  doubtful.  The  clan  system  is 
still  very  strong  in  Japan  and  this  clanship  of  a  few  of 
the  ruling  families  is  an  influence  difficult  to  combat  on  the 
part  of  liberalism.  The  time  must  come  when  the  Im- 
perial forces  have  less  power  than  to-day,  and  when  the 
portfolio  of  war  may  be  given  to  a  civilian,  before  we 
can  expect  too  confidently  a  liberal  government  in  Japan, 
that  will  place  commerce  above  the  army  and  navy  in 
precedence. 

The  interest  of  Japanese  capitalists  in  labor  problems 
does  not  seem  to  be  as  deep  as  the  press  reports  have  at 
times  given  one  reason  to  believe.     Mr.  J.  0.  P.  Bland 


262       FOREIGN  TRADE  MARKETS  AND  METHODS 

writes  from  Japan  in  the  early  part  of  1921,  describing 
a  Tokyo  meeting  of  "big  business  men"  connected  chiefly 
with  shipping  interests,  voting  down  as  "quixotic  foolish- 
ness" a  modest  plan  for  profit-sharing  among  workmen. 

The  industrial  worker  knows,  or  thinks  he  knows  (writes  Mr. 
Bland),  that  so  long  as  the  family  system  remains  the  founda- 
tion of  social  structure,  the  gospel  of  Karl  Marx  will  make  no 
more  headway. 

As  to  the  labor  movement  it  is  significant  to  note  that 
there  are  25,000  factories  in  Japan,  employing  over  2,000,- 
000  workers,  and  that  up  to  the  present  time  the  Govern- 
ment has  declined  to  permit  organization  of  labor  unions. 
Furthermore  there  is  no  regular  organized  labor  party  in 
the  country,  nor  have  there  appeared  on  the  horizon  any 
notable  political  leaders  who  seem  desirous  of  leading  such 
a  party.  Yet  in  the  city  of  Tokyo  with  its  active,  teeming 
three  millions  of  people,  there  is  evidence  of  unrest  and  the 
older  Japanese  have  cause  to  lament  the  passing  of  ancient 
Japanese  virtues.  Many  of  these  sterner  traits,  according 
to  some  of  the  Japanese  leaders,  have  been  swept  away  by 
the  new  material  industrialism. 

Marquis  Okuma  is  reported  to  have  suggested  not  long 
ago  that  while  the  antagonism  to  Japan  may  have  arisen 
from  jealousy  of  her  progress,  nevertheless  his  country- 
men may  have  waxed  "selfish  and  conceited"  by  reason  of 
their  successful  commercial  and  military  policies. 

Judging  from  the  reports  of  those  who  have  recently 
come  from  the  Sunrise  Kingdom  there  is  evidently  a  fear 
among  the  soberer  Japanese  statesmen  of  the  growth  of 
suspicion  of  the  Japanese  trade  integrity,  particularly  in 
such  matters  as  trade-marks  and  unfulfilled  contracts.  The 
Japanese  have  a  fear  of  "moral  isolation,"  and  this  proud 
and  progressive  country  will  doubtless  make  many  sacrifices 
rather  than  allow  the  new  Japan  to  become  isolated  from 
the  rest  of  the  world. 


MUTUAL  MARKETS— UNITED  STATES  AND  JAPAN  263 

Many  Japanese  seem  to  have  a  feeling  that  further 
Chinese  aggression  may  endanger  the  standing  of  Japan 
among  the  Western  nations,  yet  between  the  ideas  of  com- 
mercial success  and  the  dream  of  Pan- Asian  imperialism 
both  the  bureaucracy  and  the  masses  of  this  country  are 
wavering  to-day. 

Although  there  is  a  tendency  among  certain  sections  of 
both  Japan  and  the  United  States  to  inject  the  military 
situation  into  national  relationships,  trade  between  these 
two  nations  has  been  steadily  increasing  during  the  last 
decade.  In  accordance  with  a  summary  published  in  Sep- 
tember, 1920,  in  the  Commerce  Montlily,  Japan  is  seen  to 
rank  third  among  the  countries  of  the  world  in  its  con- 
tributions to  the  import  trade  of  the  United  States.  Cuba 
and  Canada  only  surpass  Japan  in  the  value  of  imports 
into  this  country.  As  a  purchaser  of  American  goods, 
Japan  is  exceeded  at  present  only  by  the  United  Kingdom, 
France  and  Canada.  During  the  last  fiscal  year,  the 
imports  from  Japan  into  the  United  States  were  almost  as 
great  as  those  from  Argentina  and  Brazil  together,  while 
the  United  States  exported  to  Japan  materials  greater  in 
value  than  the  combined  exports  to  the  four  important 
South  American  countries — Argentina,  Brazil,  Chile  and 
Peru. 

Japanese  imports  into  the  United  States  between  1911 
and  1920  doubled,  increasing  from  5  per  cent  to  10  per  cent 
of  our  total  imports;  Japanese  imports  into  the  United 
States  now  form  one-tenth  of  all  imports  into  this  country, 
while  American  exports  to  Japan  are  only  a  little  in  excess 
of  one-twentieth  of  the  total  exports  of  the  United  States. 
In  the  year  1911  American  exports  to  Japan  amounted  to 
$37,000,000  or  2  per  cent  of  our  total  exports;  in  1920 
these  exports  had  mounted  to  $453,000,000  or  6  per  cent 
of  our  total  exports.  The  following  table  from  the  Com- 
merce Monthly  summarizes  the  place  that  Japan  has  held 
in  the  foreign  trade  of  the  United  States  between  1911  and 
1920: 


264       FOREIGN  TRADE  MARKETS  AND  METHODS 


Foreign  Trade  of  the  United  States  in  Relation  to  Trade 
WITH  Japan,  1911-1920 


Fiscal 

Year 

Ending 

June  30 

Total 

Imports  from 
Japan 

Total 

Exports 

to  Japan 

Imports, 

Exports, 

Amount 

Amount 

in 

Amount 

Per 

in 

Amount 

Per 

Millions 

in 

cent  of 

Millions 

in 

cent  of 

Millions 

Total 

Millions 

Total 

1911 

$1527 

$79 

5 

$2049 

$37 

2 

1912 

1653 

81 

5 

2204 

53 

2 

1913 

1813 

92 

5 

2466 

58 

2 

1914 

1894 

107 

6 

2365 

51 

2 

1915 

1674 

99 

6 

2769 

42 

2 

1916 

2198 

148 

7 

4333 

74 

2 

1917 

2659 

208 

8 

6290 

130 

2 

1918 

2946 

285 

10 

5920 

268 

5 

1919 

3096 

304 

10 

7232 

326 

5 

1920 

5239 

527 

10 

8111 

453 

6 

The  present  commercial  conditions  in  Japan,  particularly 
in  relation  to  her  trade  with  other  nations,  have  been 
influenced  decidedly  by  the  last  war.  This  war  forced  Japan 
to  produce  at  home  many  things  which  she  formerly 
imported,  thereby  greatly  hastening  her  entrance  into  the 
world  field  of  skilled  competition.  This  has  been  especially 
true  in  her  exportation  of  such  articles  as  silk,  tea,  zinc, 
manufacturers  of  copper  and  brass,  paper,  glassware  and 
cotton  goods.  There  has  been,  moreover,  a  considerable 
increase  of  Japanese  trade  with  other  Oriental  countries 
in  machinery,  hardware  and  tools. 

The  recent  financial  difficulties  of  Japan  to  which  a  num- 
ber of  Japanese  bankers  and  business  houses  have  fallen 
victims,  was  brought  about  largely  by  the  extreme  inflation 
of  credit  and  speculation.  The  heavy  accumulation  of  gold 
to  Japan's  account  occasioned  by  the  excess  of  exports 
throughout  the  years  of  the  war  was  probably  the  primary 
cause  of  Japan's  recent  inflation.  This  amount  of  gold  at 
the    end    of    1919    reached    its    largest    dimensions    and 


MUTUAL  MARKETS— UNITED  STATES  AND  JAPAN    265 

amounted  to  more  than  two  billion  yen.  This  was  a 
tremendous  change  for  Japan  since  her  gold  reserve  in 
1912,  for  example,  was  only  350,750,000  yen.  The  results 
of  this  piling  up  of  gold  in  the  domestic  market  made 
money  available  at  record  low  rates  during  the  years  of 
the  war.  The  result  was  that  every  form  of  speculation 
was  promoted  and  all  kinds  of  enterprises — many  of  them 
of  doubtful  character — were  accepted  by  credulous 
Japanese.  As  an  example  of  some  of  these  enterprises, 
there  was  a  wild  scheme  for  making  a  substitute  for  cotton 
out  of  seaweed.  The  immediate  effect  was  the  creation  of 
boundless  prosperity  in  Japan,  but  this  paved  the  way  to 
future  depression  and  the  tying  up  of  all  available  capital. 
The  record  of  these  depressing  times  in  Japan  shows  vast 
increases  of  bank  clearances,  cornering  and  holding,  to- 
gether with  other  varied  forms  of  speculation. 

Augmentation  was  the  rule  along  many  avenues  of  trade. 
Significant  in  this  enlarging  prosperity  was  Japan's  ship- 
building movement.  The  total  tonnage  turned  out  in  Japan 
in  1914  was  approximately  78,010  tons,  while  in  1916  the 
figure  rose  to  141,827  tons.  The  following  year  the  total 
amount  was  349,455  tons,  while  the  record  for  1919  was 
613,849  tons  of  shipping. 

Because  of  all  this  boom  period  a  later  reaction  was  inevi- 
table, since  the  sustaining  power  behind  these  widespread 
promotions,  the  excessive  exports  particularly,  was  spend- 
ing its  force. 

Although  in  January  of  1920  at  the  annual  dinner  of 
the  Tokyo  Associated  Banks  the  Governor  of  the  Bank  of 
Japan  declared  that  the  prosperity  of  1919  was  a  shadow 
of  what  it  had  been  and  that  Japan's  external  commerce 
was  bound  to  suffer  a  reaction,  bankers  and  business  men 
did  not  seem  to  heed  the  warning,  drunk  as  they  were, 
according  to  one  report  found  in  Eastern  Commerce,  with 
the  "shadow  prosperity"  of  the  times.  On  March  15th, 
1920,  there  came  the  first  shock  of  the  collapse  in  the 
Japanese  business  world  when  the  Tokyo  Stock  Exchange 
was  seized  with  a  sudden  panic  and  all  turned  free  sellers. 


266       FOREIGN  TRADE  MARIiETS  AND  METHODS 

For  two  days  following  the  Tokyo  market  was  unable  to 
resume  business.  Although  on  March  18th  the  stock  market 
resumed  trading,  the  market  was  indecisive  throughout  the 
month  of  March.  The  second  panic  occurred  on  the  7th 
of  April  with  heavy  slumps  in  the  Exchanges  of  both  Tokyo 
and  Osaka.  The  immediate  cause  was  the  failure  of  one 
of  the  biggest  bill  brokers  in  Japan,  the  Masuda  Bill  Broker 
Bank.  Although  the  Bank  of  Japan  came  to  the  rescue 
with  credit  and  the  market  resumed  trading  on  the  13th 
of  April,  the  following  day  marked  a  third  crisis  when  the 
House  was  unable  to  continue  business.  Now  the  panic 
had  affected  almost  all  the  lines  of  Japanese  business  and 
appeals  were  made  to  the  government  for  help.  During 
the  first  week  of  May  the  stock  market  secured  the  Bank's 
credit  and  a  provisional  settlement  was  effected.  The  stock 
exchanges  in  Tokyo,  Osaka,  and  Nagoya  resumed  trading 
on  May  10.  Although  minor  panics  followed,  things  have 
been  slowly  recovering.  The  immediate  prospect  for  the 
stock  market  was  stated  about  this  time  by  an  expert  on 
Japanese  market  conditions,  who  said  that  the  repeated 
slumps  during  the  three  months  previous  had  forced  down 
all  shares  to  their  lowest  possible  levels,  but  that  while  the 
market  may  stay  around  the  level  thus  reached,  for  a  time, 
the  weak  elements  will  gradually  be  eliminated  and  a  more 
healthy  tone  be  restored.  In  Japan,  as  in  the  United  States 
at  present,  there  is  evidenced  a  great  tightness  of  the  money 
market  and  the  effect  of  inflation  has  been  felt  strongly 
upon  the  market  in  the  textile  industry,  the  silk  industry, 
the  cereal  trade,  as  well  as  in  the  steel,  pig  iron,  copper 
and  in  the  freight  market  and  shipping  circles.  Although 
it  will  probably  take  some  time  for  Japan  to  recover  fully, 
the  country  is  financially  sound,  and  if  the  people  take  to 
heart  the  lesson  that  business  can  be  conducted  not  through 
the  gambling  spirit  but  only  upon  sound  legitimate  busi- 
ness principles,  this  country  will  evolve  from  the  financial 
difficulties  and  be  strengthened  by  her  experience  in  her 
future  commercial  and  financial  activities 
With  the  certain  return  of  Japanese  financial  and  com- 


MUTUAL  MARKETS— UNITED  STATES  AND  JAPAN  267 

mercial  strength  to  the  competitive  markets  of  the  world, 
the  question  of  this  country's  competition  in  Japanese 
goods  imported  into  the  United  States  since  1911  becomes 
an  important  one.  Can  the  Japanese  compete  in  the 
domestic  markets  of  this  country?  This  depends  upon 
several  conditions. 

The  matter  of  distance  is  always  an  important  element 
in  trade  competition.  Yokohama  is  4536  nautical  miles* 
from  San  Francisco  and  9699  miles  from  New  York  by  the 
way  of  the  Panama  Canal,  and  8414  miles  by  water  and 
railroad  via  San  Francisco.  This  fact  is  a  direct  handicap 
to  Japanese  competition  particularly  in  the  heavier  classes 
of  commodities  which  the  United  States  can  produce  by 
reason  both  of  her  native  resources  and  her  ability  in  labor' 
supply.  Although  Japanese  competition  may  become  a 
threatening  influence  to  American  interests  on  the  Pacific 
coast,  it  must  be  remembered  that  the  vast  percentage  of 
the  purchasing  power  is  east  of  Denver  and  that  90  per 
cent  of  the  population  of  the  United  States  lies  east  of  that 
city. 

Moreover,  it  must  not  be  judged  that  the  Japanese  have 
superior  competitive  ability  over  us  simply  by  the  measure- 
ment of  relative  labor  costs.  Wages  in  Japan  have  natur- 
ally advanced  to  meet  the  increased  cost  of  living,  but  in 
addition  to  this  fact  wages  in  terms  of  money  are  not  a  cri- 
terion to  ability  in  competition.  The  true  basis  of  compari- 
son lies  rather  in  the  "quality  and  quantity  of  product  as 
measured  by  costs  per  labor  unit"  as  a  economic  writer 
points  out.  Furthermore,  for  Japan  to  become  a  serious 
competitor  with  the  United  States  along  lines  in  which  this 
country  is  fitted  to  produce,  she  must  not  only  have  lower 
labor  costs  but  enough  lower  to  offset  the  freight  charges 
and  the  many  difficulties  of  marketing  in  a  foreign  country. 
It  is  also  a  question  whether  the  reputation  which  Japan 
has  had  at  times  for  manufacturing  inferior  goods,  espe- 
cially in  such  lines  as  toys  and  small  articles,  will  not  make 
for  her  an  additional  handicap  in  competing  with  the  high 
quality  of  American  manufacturers.    As  far  as  this  subject 


268       FOREIGN  TRADE  MARKETS  AND  METHODS 

is  concerned,  it  is  our  belief  that  the  competitive  elements 
of  comparative  advantage  or  disadvantage  are  fairly  well 
distributed  between  the  two  nations,  and  the  American 
inventive  genius,  skill  and  organizing  ability  are  not  to 
be  overlooked  as  means  of  keeping  the  United  States  to 
the  front  in  this  or  any  other  similar  competition  from  a 
distant  land. 

The  fact  of  mutual  markets  is  revealed  to  be  something 
more  than  a  slogan  because  the  articles  which  are  most 
generally  imported  from  Japan  are  not  produced  in  our 
own  country  to  any  great  extent,  and  vice  versa.  For 
example,  in  the  production  of  silk,  tea,  camphor  and  such 
produce  as  beans,  peas,  soya  bean  oil,  peanuts  for  oil  and 
what  is  known  generally  as  ''Oriental  goods,"  Japan  may 
have  a  large  market  in  the  United  States,  without  endanger- 
ing our  own  products.  To  quote  from  a  San  Francisco 
newspaper  which  published  some  time  ago  a  list  of  articles 
taken  from  the  invoice  of  a  steamship  reaching  San  Fran- 
cisco from  Kobe,  the  general  character  of  Japanese  imports 
to  the  United  States  may  be  discovered. 

6  pkgs,  silk  goods  187  es.  porcelain  ware 

49  cs.  crockery  5  es.  woodenware 

19  cs.  chinaware  43  cs.  incense  and  clay  ware 

3  es.  paper  fans  75  es.  toys 

170  cs.  shelled  peanuts  700  cs.  white  arsenic 

679  cs.  canned  crabs  10  bbls.  agar  agar 

620  grass  rugs  6200  bgs.  potato  starch 

15  bbls.  sparteries  60  drums  safrol 

37  cs'.  beads  and  strings  3  bbls.  jute  carpets 

1  es.  paper  tape  5000  cs.  peanut  oil 

8  cs.  bronzeware  40  cs.  insect  powder 

2  cs.  vacuum  flasks  200  bgs.  chillies 

287  bbls.  hemp  braids  2  cs.  lacquered  ware 

366  bbls.  straw  braids  10  cs.  dolls 

47  cs.  straw  hats  15  cs.  imitation  gold  leaf 

100  bbls.  cotton  thread  waste       171  cs.  kid  leather 

5  es.  bristles  124  cs,  fishing  poles 

35  cs.  paper  hats  3  es.  merchandise 

65  es.  umbrella  handles  2  es.  curios 

69  cs.  brushes  1  crt.  baskets 


MUTUAL  MARKETS— UNITED  STATES  AND  JAPAN  269 

In  return  for  such  purchases  Japan  is  enabled  to  buy 
from  us  raw,  manufactured  and  semi-manufactured  ma- 
terials which  the  United  States  produce  in  excess  of  domes- 
tic needs.  Such  materials  may  be  suggested  as  raw  cotton, 
iron  and  steel,  machinery  and  engines,  kerosene  oil  and 
chemicals.  Thus  reciprocal  and  mutual  trade  advantages 
are  served  and  a  sound  basis  exists  for  an  ever  enlarging 
selfish  advantage  on  the  part  of  both  Japan  and  the  United 
States  of  trade  with  each  other.  In  fact,  it  must  be  remem- 
bered that  60  per  cent  of  the  iron  and  steel  purchased  by 
Japan  in  1919  was  from  the  United  States  and  80  per  cent 
of  Japan 's  imports  of  kerosene  oil  came  from  this  country. 
Those  who  would  promote  jingoistic  doctrines  and  endeavor 
to  embroil  the  United  States  and  Japan  in  war  may  remem- 
ber with  profit  that  Japan  is  more  dependent  upon  the 
United  States  for  her  trade  than  upon  any  other  single 
nation,  and  that,  in  a  sense  truer  than  we  sometimes  appre- 
ciate, trade  rules  sentiment  as  well  as  the  pocketbook  of 
the  world. 

Other  commodities  might  be  cited  such  as  cotton,  which  is 
probably  the  largest  single  commodity  exported  from  the 
United  States  to  Japan.  This  export  of  American  cotton 
to  the  Sunrise  Kingdom  has  grown  from  323,202  bales  in 
the  fiscal  year  1900  to  881,041  bales  in  the  calendar  year 
1919.  It  would  seem  sensible  to  believe  that,  with  the 
tendency  of  Japanese  cotton  manufacturers  to  produce  finer 
yarn  and  higher  grades  of  cotton  piece  goods,  American 
cotton  would  hold  an  ever  enlarging  place  in  inter-trade 
relations  between  the  two  countries. 

In  view,  therefore,  of  the  progressive  and  rapidly  expand- 
ing commercial  life  of  both  these  nations,  and  realizing 
the  inter-dependence  of  Japan  and  the  United  States  upon 
each  other  in  a  commercial  interchange  of  goods  and 
produce,  the  future  of  trade  between  the  two  nations  would 
seem  to  be  a  permanent  and  ever  enlarging  actuality.  Only 
let  the  trader  remember  that  trade  is  a  shuttle  running  both 
ways,  and  that  both  parties  to  the  commercial  contract 


270      FOREIGN  TRADE  MARKETS  AND  METHODS 

must  secure  advantage,  if  the  trade  relationships  are  to  be 
lasting. 

Japan  needs  the  trade  of  the  United  States  and  the 
United  States  cannot  afford  to  lose  the  trade  of  Japan. 
These  facts  contain  the  inevitable  reasons  for  mutual 
markets  between  the  two  countries. 


CHAPTER  XVII 
STRENGTHENING   AMERICAN   TRADE   WITH  CHINA 

Our  trade  with  China,  like  our  commerce  with  certain 
other  far-away  countries,  has  suffered  because  of  wrong 
conceptions  or  perhaps  from  false  traditional  ideas  which 
are  usually  hard  to  dislodge.  I  once  asked  a  theatrical 
producer  why  he  persisted  in  making  his  Chinese  characters 
wear  queues  or  pigtails  when  the  Chinese  men  have  long 
ago  discarded  these  in  China,  also  why  he  made  Japanese 
men  wear  bright  kimonos  on  the  stage,  when,  as  a  rule, 
only  Japanese  children  wear  such  bright  colors  in  the  Sun- 
rise Kingdom,  the  men  being  clothed  in  garments  of  sober 
hues.     He  answered: 

Why,  the  American  public  always  think  of  Chinamen  as  hav- 
ing pigtails  and  the  Japanese  in  bright-hued  kimonos.  They 
wouldn't  like  it,  wouldn't  be  satisfied  unless  we  did  it  on  the 
stage,  any  more  than  the  public  would  recognize  a  preacher 
before  the  footlights  without  a  clerical  waistcoat,  a  flat  hat  and 
carrying  a  prayer  book. 

In  other  words,  custom  has  worked  against  a  true  under- 
standing of  foreign  countries.  This  has  been  true  not  only 
on  the  stage,  but  also  in  our  literature  and  often  in  our 
conversation.  Foreign  countries  are  far  away  in  thought 
to  the  average  American.  The  result  is  that  when  we  come 
to  the  opening  of  the  great  trade  routes  to  the  Orient,  as 
at  present,  we  find  ourselves  lamentably  lacking  in  infor- 
mation concerning  actual  conditions  in  the  Far  East.  Nor 
have  these  misconceptions  been  dissipated  greatly  by  our 
usual  American  travelers  who  have  gone  to  the  East  in  a 

271 


272       FOREIGN  TRADE  MARKETS  AND  METHODS 

band  of  tourists,  personally  conducted  by  one  or  more  super- 
ficially informed  American  dragomen.  These  guides,  out- 
side of  a  knowledge  of  steamer  and  train  schedules  and 
certain  details  of  port  bargaining,  are  usually  blissfully 
ignorant  of  the  intent,  motives,  history  and  race  character- 
istics of  the  Oriental. 

To  understand  an  Easterner  requires  more  than  a  globe 
trotting  journey  in  a  Cook  party;  it  means  something 
beyond  and  other  than  living  in  European  hotels,  or  gather- 
ing up  souvenirs,  or  talking  with  donkey  boys  or  coolie 
servants.  To  understand  an  Easterner,  enough  to  be  able 
to  do  business  with  him,  a  man  must  set  his  attention  upon 
the  history,  language,  customs,  geography,  together  with 
the  laws,  religion  and  predilections  generally  of  a  foreign 
nation.  Such  attention  we  have  not  yet  given  to  China. 
Until  we  can  really  seize  this  truth,  and  take  definite  steps 
as  a  nation  to  mend  our  ways,  we  shall  see  our  possible 
trade  go  to  other  countries,  better  equipped  with  method 
as  well  as  with  knowledge  than  we  are. 

Previous  to  the  European  war  there  were  only  three  or 
four  important  American  firms  doing  business  in  China 
and  our  percentage  of  China's  foreign  trade  according  to 
the  report  of  the  Committee  on  the  Judiciary  in  Congress, 
amounted  to  about  6  per  cent.  The  balance  of  Chinese 
trade  went  to  Great  Britain,  Germany,  France  and  Japan, 
with  smaller  amounts  to  various  other  countries.  Because 
of  the  unusual  stimulus  given  to  our  trade  in  the  Far  East 
by  reason  of  the  war,  our  percentage  in  foreign  commerce 
with  China  is  at  present  about  17  per  cent  or  in  the  year 
1919  at  least  amounting  to  $287,000,000.  The  number  of 
American  firms  commercially  interested  in  China  included 
in  the  membership  of  the  American  Chamber  of  Commerce 
in  China  at  Shanghai  has  increased  from  48  in  1915  to 
313  in  1920. 

These  companies  for  the  most  part  are  comparatively 
small  firms,  representing  manufacturers  in  the  United 
States  and  promoting  the  sale  of  products  such  as  machin- 
ery, hardware,  cotton  and  cotton  manufactures,  food  prod- 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA     273 

uets,  motor  cars,  typewriters  and  office  supplies,  wearing 
apparel  such  as  shoes,  underwear,  hosiery,  shirts  and  collars 
and  clothing  materials,  paint  and  varnish,  building  equip- 
ment such  as  lumber  and  nails,  electrical  equipment,  loco- 
motives and  freight  cars,  general  railroad  equipment  such 
as  rails,  bridge  materials,  and  timber,  dyes  and  chemicals, 
kerosene,  tobacco  products  and  products  of  our  mines 
such  as  iron  and  steel  which  are  used  for  construction 
purposes.  In  general,  it  may  be  stated  that  China  at  present 
constitutes  a  wide  market  for  practically  everything  pro- 
duced in  America. 

In  order  to  make  it  possible  for  the  United  States  to  enter 
this  expanding  field  of  trade  among  one  of  the  oldest  and 
most  numerous  populations  of  the  world,  certain  legislative 
changes  are  required.  It  is  to  meet  such  needs  of  American 
trade  that  the  China  Trade  Act  has  been  brought  to  the 
favorable  attention  of  the  President,  of  the  Secretary  of 
State  and  the  Secretary  of  Commerce,  who  have  indorsed 
it,  and  it  possesses  the  promise  of  being  enacted  into  law 
and  thereby  greatly  facilitating  the  development  of  our 
Far  Eastern  commerce. 

The  difficulties  which  this  China  Trade  Act  is  intended 
to  overcome  were  outlined  in  the  report  of  Mr.  Dyer  from 
the  Committee  on  the  Judiciary  in  the  House  of  Represen- 
tatives and  are  summarized  as  follows : 

China  is  an  ex-territorial  country,  which  means  that  all  foreign 
merchants  doing  business  in  China  must,  by  treaty,  do  so  under 
their  own  laws  and  regTilations. 

For  example:  Americans  must  do  business  under  American 
laws;  British  under  British  laws;  French  under  French  laws; 
Japanese  under  Japanese  laws;  and  so  on.  This  is  due  to  the 
fact  that  the  young  Republic  of  Cliina  has  not  yet  codified  her 
laws  and  modernized  her  courts  to  the  extent  that  foreigners 
may  become  subject  to  them.  Practically  every  country  inter- 
ested in  the  China  trade,  and  this  applies  especially  to  our 
strong  competitors,  has  adopted  special  laws  for  the  control  and 
promotion  of  its  business  in  China.  America  has  never  done 
this,  and  as  a  result  American  companies  doing  business  in  China 


274       FOREIGN  TRADE  MARKETS  AND  METHODS 

are  subject  to  the  conflicting  corporate  regulations  of  the  various 
48  States  and  our  Territories.  This  factor  handicaps  us  specifi- 
cally as  follows : 

First,  there  is  no  uniformity,  none  of  the  State  laws  being 
adapted  to  foreign  trade  purposes,  and  several  of  the  State 
incorporation  laws  being  lax,  permits  the  promotion  of  a  great 
deal  of  undesirable  business,  such  as  fly-by-night  promotions  that 
are  very  damaging  to  our  prestige  with  the  Chinese  business 
men. 

Second,  our  chief  competitors  in  China  are  the  British,  Japanese 
and  French,  the  French  competition  not  being  so  serious.  The 
British,  Japanese  and  French  have  enacted  special  regulations 
governing  their  companies  in  China,  exempting  them  from  the 
operation  of  home  income  and  excess  profits  taxation.  This 
places  the  American  firm  at  a  distinct  disadvantage,  since  it  can 
not  build  up  the  necessary  reserve  to  carry  over  the  years  of 
depression  and  uncertainty.  In  prosperous  years  the  American 
firm  can  meet  the  competition,  but  in  slack  times  such  as  the 
present  the  American  firms  are  going  bankrujot,  while  our  com- 
petitors are  going  along  and  getting  the  business. 

Third,  the  operation  of  the  home  income  and  excess  profits 
taxation  under  the  various  State  regulations,  upon  our  companies 
in  China,  prevents  the  Chinese  business  men  from  forming  joint 
enterprises  with  American  business  men.  The  Chinese  are  now 
striving  to  develop  their  country  industrially  and  are  anxious 
to  cooperate  with  American  merchants"  who  are  experienced  in 
the  management  of  industries  on  a  modern  basis.  Since  this 
Chinese  capital  coming  into  an  American  company  is  taxed  the 
same  as  the  American  capital,  the  Chinese  are  thus  prevented 
from  cooperating  with  us  and  are  forced  to  invest  in  British 
and  Japanese  cotopanies,  thus  throwing  the  resulting  purchases 
of  equipment  and  other  business  to  those  countries  instead  of 
the  United  States.  The  British  have  taken  advantage  of  tins 
desire  of  Chinese  business  men  for  western  experience  and  manage- 
ment and  have  built  up  much  of  their  great  business  in  China 
in  this  way;  that  is,  by  attracting  Chinese  capital.  The  lack  of 
a  uniform  high  standard  American  corporation  law  governing 
our  business  in  China  debars  us  from  these  partnerships  with 
the  Chinese  and  this  cooperation  is  the  outstanding  element  in 
the  new  development  of  China. 

Hundreds  of  Chinese  young  men  who  have  been  educated  in 
our  colleges  and  universities  and  engineering  schools  are  anxious 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA      275 

to  cooperate  with  Americans  in  the  development  of  China,  using 
American  materials,  but  they  are  debarred  by  our  failure  to 
enact  legislation  providing  the  machinery  for  cooperation.  In 
short  we  have  educated  these  young  men  in  our  ways  of  doing 
business,  but  when  it  comes  to  actually  doing  the  business  we 
shortsightedly  pennit  them  to  go  to  the  British  and  Japanese. 

Since  China  is  the  only  country  where  we  operate  to  any  great 
extent  under  extra-territorial  treaties,  a  general  law  will  not  and 
cannot  solve  the  problem  of  American  business  development  in 
China.  Furthermore,  the  present  period  of  depression  combined 
with  famine  conditions  in  China  will  not  permit  delay  if  we  are 
to  hold  our  position  and  take  advantage  of  Chinese  friendship 
for  Americans  and  American  institutions.  If  we  cannot  obtain 
the  assistance,  our  trade  is  certain  to  recede  to  the  unimportant 
position  it  occupied  before  the  war. 

A  glance  at  the  history  of  our  relationship  with  China 
reveals  the  fact  that  the  opportunity  of  doing  every- 
thing in  our  power  to  extend  American  trade  in  this  giant 
country  is  paramount.  The  commercial  languages  are 
Chinese,  English  and  French.  The  money  is  the  tael,  which 
is  a  unit  of  w^eight  for  silver.  This  unit  varies  in  weight 
and  value  in  the  different  districts,  and  its  exchange  value 
fluctuates  according  to  the  market  price  for  silver.  This 
country,  which  occupies  a  territory  one-sixth  larger  than 
continental  United  States,  possessing  a  population  four 
times  as  large  as  ours  with  similar  climatic  condition  and 
natural  resources,  has  received  for  many  years  the  effective 
service  of  our  missionaries  and  educators  while  the  "open 
door"  policy  has  helped  to  strengthen  the  confidence  and 
good  will  existing  between  China  and  the  United  States. 

Furthermore,  our  trade  relationships  with  China  date 
back  for  more  than  a  century.  One  hundred  and  thirty- 
six  years  ago  an  American  ship  visited  Canton,  China, 
with  the  result  that  a  regular  route  was  opened.  In  1778 
the  first  American  clipper  ship  visited  China  and  from  that 
date  until  1860,  when  our  sailing  ships  were  practically 
driven  from  the  seas  by  the  development  of  the  British 
merchant  marine  and  by  our  own  internal  development, 


276       FOREIGN  TRADE  MARKETS  AND  METHODS 

commerce  with  China  was  an  established  fact.  In  the  year 
1825  American  shipping  and  trade  held  the  leadership  in 
the  Far  East. 

The  following  figures  relative  to  China's  trade  with 
America,  taken  from  the  Chinese  customs  reports,  show  a 
decided  growth  between  the  years  1904  and  1919,  our  trade 
with  China  having  nearly  quadrupled  in  15  years: 

Taels 

1904  56,269,000 

1909 65,954,000 

1914  80,643,000 

1919  211,000,000 


The  figures  which  follow  reveal  also  the  encouraging  fact 
of  America's  standing  in  relation  to  the  four  principal 
nations  in  the  Shanghai  trade  for  1919 : 

United  States   $194,906,000 

Japan  156,832,000 

Great  Britain   129,147,000 

France    45,607,000 

Although  our  commerce  with  the  Far  East  has  made 
only  a  beginning,  there  has  been  notable  progress  especially 
in  the  port  cities  of  China  during  very  recent  years.  It 
is  estimated  that  more  than  70  American  firms  established 
branches  in  China  in  1920.  During  the  fiscal  year,  1919, 
American  merchandise  to  the  value  of  $117,000,000  was 
shipped  to  China  as  against  $57,000,000  in  1914.  This  is 
significant  in  view  of  the  history  of  American  trade  with 
the  Chinese  in  the  past  decade.  In  1860  the  United  States 
possessed  nearly  as  many  cargo  ships  as  Great  Britain  and 
we  then  controlled  47  per  cent  of  Chinese  trade. 

The  American  Chamber  of  Commerce  in  China  has  pre- 
pared statistics  showing  the  imports  with  percentage 
which  came  from  America  in  1918 : 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA      277 


Articles 


Per  Cent  from 
United  States 


Automobiles 

Cigarettes 

Coffee 

Cotton,  raw 

Cotton,  gray  shirtings 

Dyes :  Paint  and  paint  oil 

Electrical  materials  and  fittings 

Furniture  and  materials  for 

Iron  and  Mild  Steel: 

Bars,  new 

Nails  and  rivets 

Pipes  and  tubes 

Sheets  and  plates 

Galvanized  sheets 

Galvanized  wire 

Steel  bars,  hoops,  sheets,  plates,  etc. 

Tinned  plates 

Machinery,  textile 

Medicines 

OU: 

Kerosene 

Lubricating 

Railway  materials  (excluding  sleepers) 

Paper 

Shoes  and  boots,  leather 

Tobacco 

Wax,  paraffin 


5  1,518,666 
28,612,390 
1,072,288 
7,242,126 
12,157,359 
1,265,331 
4,930,900 
1,338,981 

3,739,522 
2,114,502 
3,444,921 
3,619,987 
1,209,203 
1,100,906 
3,094,833 
5,039,511 
1,968,538 
6,105,717 

33,690,351 
2,180,351 
8,641,572 
1,693,754 
3,020,615 
6,739,182 
1,341,212 


48 
47 
49 

61 

4 

13i 
20 
23 

37 

27 

64 

48 

43i 

45 

58 

40§ 

9 

5 

35 

61 

17 

49J 

66^ 

47 

35 


It  will  be  seen  that  a  notable  item  in  the  above  list  is 
for  electrical  supplies,  and  when  it  is  appreciated  that  there 
are  1500  walled  cities  in  China  which  are  not  furnished 
with  electricity,  gas,  street  railways  or  waterworks,  the 
opportunity  for  the  advancement  of  trade  along  this  line 
is  apparent.  Furthermore,  coal  and  water  are  plentiful 
in  China.  It  has  been  estimated  that  China  has  enough 
coal  in  her  vast  reaches  of  territory  to  supply  the  world 
for  one  million  years. 

The  open  door  for  American  machinery  is  also  signifi- 
cant.   Since  the  invention  of  the  cotton  gin,  China's  cloth- 


278       FOREIGN  TRADE  MARKETS  AND  METHODS 

ing  has  been  revolutionized,  while  farming  machinery  and 
the  use  of  all  kinds  of  agricultural  implements  will  have 
an  increasing  market  as  soon  as  our  manufacturers  and 
exporters  have  been  able  to  create  a  market  among  the  con- 
servative Chinese  cultivators  for  these  western  appliances. 

While  transportation  in  China  is  naturally  slow,  the 
country  has  river  navigation  that  is  important  for  trade, 
the  Yangtze,  for  example,  being  navigable  for  ships  for  600 
miles  to  Hankow  and  from  this  city  many  of  the  railways 
radiate  and  Chinese  highways  find  their  center.  It  is 
significant  to  note  that  a  company  has  been  organized 
recently  in  the  north  of  Shantung  to  operate  a  fleet  of  50 
American  motor  trucks  to  carry  produce  to  the  seaboard. 

One  needs  only  to  appreciate  these  vast  populations  num- 
bering more  than  400,000,000  closely  concentrated  along 
the  rivers  and  coastal  regions  with  an  excellent  climate,  a 
tremendous  coast  line,  and  not  to  mention  others — the 
Yangtze  River,  3200  miles  long;  the  Yellow  River,  2600 
miles  long;  and  the  West  River,  1200  miles  in  length — 
furnishing  vast  opportunities  both  for  transportation  and 
water  power. 

In  order  to  make  China,  which  is  manifestly  one  of  the 
greatest  potential  buyers  among  the  nations,  a  present 
opportunity  for  the  largest  American  trade,  it  is  necessary 
that  our  manufacturers  and  exporters  appreciate  tho 
definite  things  that  China  needs  at  present  such  as  machin- 
ery to  develop  her  industries,  and  financial  assistance  such 
as  is  being  rendered  through  certain  banks,  notably  the 
Sino-American  Bank.  There  is  need  of  a  trade  policy  that 
will  be  continuous  regardless  of  political  changes  at  home 
or  in  China,  also  regardless  of  international  politics,  delays 
and  the  difficulties  attendant  upon  experimenting  in  busi- 
ness with  a  foreign  land.  Trade  with  China  as  with  other 
foreign  nations  has  been  too  much  a  temporary  matter, 
some  thing  to  be  taken  up  for  a  trial  rather  than  entered 
into  as  a  policy  of  the  house,  strongly  backed  by  capital 
and  able  leadership. 

A  necessity  of  legislation  is  also  required  to  make  it 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA     279 

possible  for  American  traders  to  do  business  in  China  in 
competition  with  foreign  firms ;  it  is  especially  needful  that 
our  laws  relative  to  immigration  be  modified  in  such  a  way 
as  to  admit  at  least  Chinese  students  who  are  eager  to 
come  to  this  country  to  study  our  machines,  our  factories 
and  to  get  technical  knowledge  in  our  schools.  At  present 
these  students  cannot  come  to  us  easily ;  the  requirement 
of  $500  on  landing  being  a  bar  in  many  cases  and  these 
young  Chinese  are  looked  upon  as  laborers  by  the  law. 
No  such  rules  keep  Chinese  students  out  of  other  nations. 
France,  for  example,  is  inviting  earnestly  Chinese  students 
to  come  to  that  country  to  learn  to  use  French  machines 
and,  instead  of  making  travel  to  France  difficult,  plans  are 
being  made  for  cheaper  rates  of  travel  for  Chinese  students. 
Nearly  1000  Chinese  students  are  already  in  France,  and 
it  is  estimated  that  between  5000  and  6000  Chinese  students 
will  pour  into  France  within  the  next  two  or  three  years. 
The  German  and  Japanese  colleges  are  being  avoided  by 
the  Chinese  at  present  and  it  is  a  very  opportune  moment 
for  the  United  States  to  take  action  that  will  make  possible 
a  larger  influx  of  Chinese  students  into  this  country  for 
the  purpose  of  preparing  themselves  for  Chinese  industries. 
Such  youth  will  carry  back  from  this  country,  not  only 
good  will,  but  a  knowledge  of  our  scientific  and  mechanical 
appliances  such  as  will  naturally  cause  the  Chinese  to  look 
to  the  United  States  for  an  industrial  market.  Great 
Britain  has  seen  the  successful  result  of  donating  machin- 
ery to  Hongkong  University,  since  it  is  natural  for  a 
country  to  follow  its  knowledge  and  acquaintance  of  im- 
ported products  with  orders. 

A  suggestion  has  been  given  in  an  address  before  the 
American  Manufacturers'  Export  Association  by  Com- 
mercial Attache,  Julian  Arnold,  of  Peking,  who  advances 
a  definite  suggestion  to  American  exporters  seeking  con- 
nection with  Chinese  markets : 

Let  us  have  in  Shanghai  (said  Mr.  Arnold),  an  American 
industrial  exhibit,  not  a  permanent  exhibit,  not  a  thing  that  will 
be  a  dues  collector,  but  an  exhibit  that  will  last  for  a  period 


280       FOREIGN  TRADE  MARKETS  AND  METHODS 

of  three  or  four  months.  These  people  want  to  see  our  materials'. 
It  is  true  that  our  merchants  in  Shanghai — we  have  two  hundred 
American  firms  in  Shanghai,  two  thousand  Americans  in  the 
population  there,  and  an  American  Chamber  of  Commerce  there 
— it  is  true  that  the  organizations  have  their  showrooms  and 
exhibit  rooms  and  they  exhibit  certain  American  machinery  and 
the  other  materials  they  have  to  sell,  but  the  Chinese  don't  know 
where  it  is  and  they  can't  find  it. 

Now,  it  would  be  well  for  us  if  we  created  in  Shanghai  an 
exhibition  hall  where  we  could  put  for  a  period  of  three  or 
four  months  certain  manufactured  articles  which  would  commend 
themselves  to  the  Chinese  to-day,  as  Shanghai  is  the  great  trad- 
ing center  of  China,  and  the  Chinese  come  from  all  over  China 
down  there,  the  same  as  people  here  come  to  New  York,  only 
that  we  find  Shanghai  is  the  Chicago  and  New  York  of  China 
combined  into  one,  and  60  per  cent  of  China's  import  and  export 
trade  goes  through  Shanghai.     It  is  a  very  strategic  center. 

If  the  American  Manufacturers'  Export  Association  wants  to 
do  something  for  its  future  in  China,  it  will  be  a  splendid 
thing  for  it  if  it  will  try  to  develop  an  exposition  of 
American  products.  It  probably  would  be  well  to  do  it  with 
the  organization  in  China  so  that  if  you  are  giving  an  exhibition 
of  American  toilet  articles  or  building  materials  or  hardware, 
there  is  somebody  on  the  ground  who  can  explain  it  to  these 
people  and  who  can  follow  up  a  possible  order  for  goods  and 
can  cash  in  on  it.  We  want  it  there  for  business  purposes,  not 
for  academic  purpos'es. 

I  will  give  you  a  few  lines  that  would  be  very  effectively 
exhibited  in  that  place.  There  is  high-class  cotton  goods,  but 
our  finer  grades  of  American  cotton  goods  will  command  a  better 
market  in  China  when  there  is  a  better  selling  organization 
there  for  the  exploiting  of  the  possibilities  in  that  direction. 
Then  certain  clothing,  shoes',  hosiery,  garters  and  hats  and  articles 
of  that  sort.  Recently,  the  Chinese  Industrial  Guilds,  a  new 
organization  in  China,  came  together,  and  I  read  a  Chinese 
paper  the  other  day  showing  they  wanted  to  know  if  it  was 
possible  to  get  American  hats  at  less  than  eight  dollars  apiece, 
having  them  made  in  two  or  three  lots  and  getting  them  cheaply 
enough  so  that  they  could  buy  them.  The  trouble  to-day  is  that 
a  great  many  firms  are  more  or  less  profiteering  on  this  exchange 
rate,  so  that  it  ought  to  be  possible  to  get  American  hats  for 
less  than  eight  dollars. 


Copyright,  Underwood  &  Underwood,  N.  Y. 


COOLIES  CARRYING  CHESTS  OF  GOODS  ON  THE  HANKOW  WATER  FRONT. 
HANKOW,  ONE  OF  CHINA's  MOST  IMPORTANT  CITIES,  IS  SITUATED  AT 
THE  JUNCTION  OF  THE  YANG-TSE-KIANG  AND  HAN  RIVERS  AND  IS 
REACHED   BY   MERCHANT   VESSELS. 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA      281 

Then  again,  there  is  a  demand  in  hardware,  the  building  hard- 
ware. The  Chinese  are  going  to  rebuild  their  cities.  In  Shanghai 
to-day  there  are  new  stores  going  up  and  they  are  built  in  a 
modern  fashion  and  they  want  American  hardware  and  fittings 
and  plate  glass  windows.  Shanghai  is  to  be  rebuilt  in  the  next 
few  years.  Already  they  have  about  ten  million  dollars'  worth 
of  building  contracts  to  let.  When  a  man  puts  up  a  building  of 
a  modern  sort  in  China  the  other  man  is  shamed  into  it.  One 
of  them  gets  started  and  then  all  the  people  on  the  street  follow 
suit. 

In  notions  and  toilet  articles  and  dyes  the  market  is  open. 
The  Chinese  people  don't  realize  that  we  can  manufacture  dyes. 
People  have  told  them  that  we  could  not  make  dyes.  It  is  up  to 
us  to  put  uj)  an  exhibition  and  show  them  we  can  make  dyes. 
Then  there  are  such  things  as  graphophones  and  motor  cars; 
also  modern  plumbing  materials,  knitting  machines,  modern  looms. 
They  are  putting  in  cotton  mills  and  buying  them  faster  than 
we  can  make  them;  grinding  machines,  flour  mills,  agricultural 
implements  of  a  certain  sort;  a  plow  adapted  to  the  Chinese 
conditions  would  be  very  successful.  The  purchasing  power  of 
the  Chinese  is  higher  than  that  of  the  Philippines.  We  can 
give  the  Chinese  a  plow  which  they  will  use  largely,  if  we 
investigate  and  make  a  plow  that  will  fit  their  conditions. 

There  are  large  possibilities  in  trade  in  modern  furniture, 
beds  and  things  of  that  sort;  also  tinned  fruits,  and  clocks  and 
watches  and  candies  and  school  and  laboratory  apparatus.  The 
people  are  building  their  schools  very  rapidly  and  they  want 
all  appliances  in  that  direction. 

Certain  large  American  business  concerns  like  the  Singer 
Sewing  Machine  Company,  The  Standard  Oil  and  the 
American  Tobacco  Company,  together  with  a  few  of  our 
American  banking  enterprises  have  penetrated  somewhat 
into  the  interior  cities  and  towns  of  China,  but  as  for 
American  trade  generally  having  reached  the  vast  popu- 
lations pressed  closely  into  their  4,300,000  square  miles 
(an  area  1%  times  that  of  the  United  States,  excluding 
Alaska — a  population  with  only  6000  miles  of  railway  as 
against  our  260,000  miles),  only  a  slight  beginning  has 
been  made.  It  is  a  huge  task  that  confronts  us — the  cap- 
turing of  the  thought  as  well  as  the  trade  life  of  this  vast, 


282       FOREIGN  TRADE  MARKETS  AND  METHODS 

conservative,  superstitious,  slow-moving  and  sensitive, 
frugal  and  industrious  nation — Orientals  with  all  the  sub- 
tlety and  mystery  embodied  in  that  term. 

We  would  commend,  for  those  particularly  interested  in 
American  trade  with  China,  the  two  articles  appearing  in 
the  May,  1920,  issue  of  Asia.  One  of  these  articles  is  by 
Prof.  John  Dewey,  who  has  traveled  recently  in  China  and 
presents  thoughtfully  his  reasons  for  the  great  conservatism 
of  these  people.  One  of  the  main  reasons,  he  states,  is  the 
closely  packed  communities  in  which  even  a  slight  innova- 
tion or  change  is  inclined  to  dislocate  life,  cause  trouble 
and  disarrange  business,  for  which  the  Chinese  care  more 
than  for  almost  anything  else ;  the  other  article  is  by  H.  K. 
Richardson,  an  engineer,  who  narrates  concrete  examples 
of  successful  American  business  in  inland  China  gained 
from  a  somewhat  unusual  experience  investigating  mining 
and  river  conditions  in  that  country. 

Mr.  Richardson  speaks  of  the  possibilites  of  American- 
Chinese  business  partnerships  and  declares  that  American 
selling  methods  will  find  the  Chinese  mind  ready  to  act  at 
present  and  that  there  is  a  great  need  in  China  of  educa- 
tion along  modem  methods  of  keeping  books,  financial  pro- 
cedure and  the  proper  balancing  of  stock  and  choosing 
proper  locations  for  business.  To  the  neglect  of  such  matters 
are  attributed  70  per  cent  of  the  Chinese  failures  in  business. 
The  article  is  composed  of  a  narration  of  incidents  relative 
to  Chinese  shopkeepers  and  mechanics  by  one  who  is  evi- 
dently acquainted  with  the  detail  of  Chinese  daily  business 
procedure,  especially  from  the  native  point  of  view.  He 
shows  the  signs  of  progressiveness  of  the  Chinese  as  they 
have  followed  American  and  European  methods,  the  man- 
ner of  displaying  foreign  importations  in  line  with  western 
advertising  methods,  etc.  He  emphasizes  the  great  need 
to  teach  the  Chinese  proper  advertising  methods  since  much 
of  their  stock  is  unknown  to  the  foreign  communities  of 
the  larger  cities.  He  suggests  that  American  manufacturers 
form  an  association  to  place  good  advertising  men  in  the 
field  to  guide  the  Chinese  merchant  along  new  patlis,  back- 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA      283 

ing  up  these  promoters  in  the  interior  provinces  with  a 
store  of  goods  which  the  Chinese  merchant  could  buy  for 
cash  and  obtain  delivery  in  a  short  time. 

Among  the  most  profitable  things  for  Americans  to  stock 
and  sell,  the  author  states,  would  be  goods  usually  sold  in 
5  and  10  cent  stores  in  the  United  States,  such  as,  cheap 
tools,  shears,  perfumes,  soaps  and  jewelry.  All  these 
remarks  refer  to  inland  Chinese  cities.  The  motion  pictures 
are  of  great  use  in  such  a  campaign  of  education. 

Another  American  opportunity  presented  is  the  modern- 
ization of  the  older  Chinese  industries  by  the  introduction 
of  American  machinery  in  the  factories  to  make  Chinese 
products  like  silk,  for  example,  conform  to  the  standards 
of  the  rest  of  the  world.  The  author  suggests  that  such 
industry  should  be  followed  along  the  line  of  the  family 
system  so  strongly  intrenched  in  China — small  industrial 
units  being  formed  in  the  control  of  a  single  clan. 

The  author  believes  that  the  great  industries  will  have  to 
be  financed  by  foreign  capital  or  a  combination  of  Chinese 
and  foreign  capital — the  Chinese  being  given  a  large  share 
in  the  operation,  since  a  strictly  foreign  corporation  is 
looked  upon  with  suspicion  in  such  sections  as  Szechuan. 
He  illustrates  how  American  big  business  has  shown  the 
way  in  the  establishment  of  the  American-Chinese  Bank  at 
Peking,  financed  and  backed  by  a  combination  of  the  Pacific 
Development  Corporation  interests  of  New  York ;  Hayden, 
Stone  &  Company,  bankers,  Boston,  and  the  Chase  National 
Bank  of  New  York.  This  is  only  a  beginning  of  great 
things  in  the  American-Chinese  joint  capitalistic  develop- 
ment of  China, 

It  has  been  my  privilege  to  make  two  somewhat  extended 
visits  to  China.  Wliile  no  one  can  pretend  really  to  know 
the  Chinese  by  visits  of  a  few  months'  duration  even  if 
these  months  are  thoughtfully  and  carefully  spent  in  inves- 
tigation, one  becomes  convinced  that  these  people  are  among 
the  steadiest,  the  most  intelligent  and  the  most  promising 
commercially  of  all  Easterners.  The  Chinese  are  worth 
our  study  and  American  trade  with  China  is  worth  sacrifice. 


284       FOREIGN  TRADE  MARKETS  AND  METHODS 

It  will  repay  all  the  costs  to  get  our  salesmen,  our  repre- 
sentatives who  are  to  live  in  China,  well-grounded  in  the 
Chinese  language,  as  do  other  nations,  and  to  learn  of  the 
many  differences  between  ways  of  doing  business  in  the 
antipodes  and  the  manner  in  which  we  carry  it  on  in  New 
York  and  Chicago.  One  trouble  with  our  American  trade 
in  the  East  lies  in  the  fact  that  we  have  tried  to  get  our 
fitting  and  equipment  for  it  at  a  bound.  Infinite  pains 
and  dogged  determination  and  perseverance  are  required 
to  learn  the  Oriental,  the  motions  of  his  spirit,  and  his 
manner  of  trade. 

It  is  true  of  China  as  of  India  that  "slow  siege"  is  the 
better  plan.  In  an  interview  with  Dr.  Wu  Ting  Fang, 
former  minister  to  the  United  States,  in  his  spacious  home 
in  Shanghai,  he  said  to  me  shortly  before  the  war:  "You 
Americans  want  to  go  too  quick  for  us."  On  another 
occasion  this  Chinese  diplomat  and  astute  student  of  things 
East  and  West  is  reported  to  have  said: 

An  American  is  apt  to  be  in  too  much  of  a  hurry.  He  should 
make  up  his  mind  that  if  lie  has  an  article  that  the  Chinese 
want  they  will  buy  it  eventually  but,  that  it  will  take  a  little 
longer  to  introduce  his  goods  in  China  than  in  the  United  States; 
but  he  should  also  remember  that  once  he  gets  his  article  estab- 
lished it  wiU  continue  to  sell  for  a  long  time  and  indeed  will 
never  be  displaced  until  another  article  of  the  same  kind,  but 
of  conspicuously  higher  merit  and  cheaper,  is  introduced. 

The  Chinese  nature  is  not  much  different  from  that  of  other 
human  beings.  What  at  first  is  a  luxury  soon  becomes  a  necessity 
in  China  as  elsewhere.  I  have  seen  this  demonstrated  in  Shanghai. 
A  young  merchant  from  the  interior  comes  to  Shanghai  for  the 
first  time.  He  is  taken  about  and  entertained  by  the  local 
merchants.  He  is  introduced  to  some  of  the  delights  of  the 
modern  civilization.  After  that  he  is  never  the  same  man.  He 
longs  for  luxury  once  he  has  tasted  it.  He  likes  the  cigarettes; 
he  likes  the  scented  soaps,  the  wines,  perfumery,  foreign  clothes, 
automobiles,  upholstered  furniture.  It  is  largely  beyond  his 
reach  because  of  its  cost,  but  as  he  begins  to  feel  better  financially 
he  adds  to  bis  stock  of  foreign  introduced  luxuries,  and  enjoys 
them. 


STRENGTHENING  AMERICAN  TRADE  WITH  CHINA     285 

How  are  we  to  go  to  work  to  capture  more  completely 
a  trade  with  a  country  where  our  imports  are  still  far  in 
excess  of  our  exports,  in  fact  nearly  three  to  one?  That 
our  trade  has  increased  rapidly  within  the  last  ten  years, 
nearly  100  per  cent  in  fact,  until  it  now  amounts  to 
over  $300,000,000  a  year,  is  encouraging — if  you  do  not 
consider  the  greater  trade  of  Britain,  for  example.  But 
to-day  is  the  acceptable  time  for  the  promotion  of  Chinese 
trade.  This  old  country  is  rapidly  becoming  a  new  land 
in  her  westernization  and  the  progressive  spirit  of  her  youth 
educated  abroad.  China  is  at  the  threshold  of  her  modern- 
ization. Her  industrial  development  is  at  hand.  The  field 
is  tremendous.  One-half  of  the  population  even  now  are 
without  wheeled  vehicles.  China  requires  railway  materials 
and  mining  equipment  on  a  vast  scale.  She  wants  public 
utilities,  electrical  plants,  agricultural  machinery,  factory 
equipment  and  all  kinds  of  metal  products.  As  Sir  Robert 
Hart  says : 

China  may  not  know  she  wants  these  things,  but  it  is  part 
of  our  task  to  create  the  desire  for  these  manufactured  products 
that  belong  to  the  psychological  moment  in  Chinese  history. 

China  is  for  us  in  a  peculiar  way  a  field  of  unique  and 
rich  possibilities  because  of  our  past  relationships  with 
her.  It  was  our  country,  through  the  efforts  of  John  Hay, 
that  brought  in  the  emancipating  trade  idea  of  the  "open 
door"  for  China.  No  country  in  the  East  needs  our  help 
at  present  more  than  China,  groping  for  a  settled  govern- 
ment, desiring  new  trade  relationships  with  the  West,  and 
striving,  often  unsuccessfully,  to  maintain  her  independ- 
ence and  territorial  rights  in  the  face  of  encroachments  of 
stronger  nations  both  East  and  West. 


CHAPTER  XVIII 

TRADE  POSSIBILITIES   AND  INDUSTRIAL  PROGRESS 
IN  THE  PHILIPPINES 

It  would  seem  to  be  a  comparatively  small  population, 
10,500,000  people,  inhabiting  the  Philippine  Islands,  but 
the  territory,  comprising  some  3141  islands  of  all  sizes  and 
conditions  of  civilization  and  barbarity,  contains  115,026 
square  miles,  a  larger  arable  area  than  that  supporting 
50,000,000  Japanese.  The  country,  moreover,  has  had  a 
chance  for  development  that  is  measured  by  centuries, 
Manila  being  founded  in  1571,  shortly  after  the  Islands 
were  discovered  by  Ferdinand  Magellan. 

There  is  a  kind  of  "lives-there-a-man- with -soul-so-dead" 
sensation  trickling  up  and  doAvn  the  spinal  columns  of 
most  Americans,  as,  after  months  of  Asiatic  wanderings, 
they  look  out  of  their  cabin  windows  on  a  tropical  morning 
upon  the  headlands  of  Luzon,  and,  sailing  calmly  into 
Manila  Bay,  pass  the  rock  island  of  Corregidor,  and  get  a 
glimpse  of  the  floating  colors  at  Cavite. 

The  American  is  more  or  less  mindful  of  that  May  day 
in  1898,  when,  by  one  tragic  stroke,  Admiral  Dewey  and 
his  fleet  ended  Castilian  supremacy  in  the  East,  and  in- 
volved the  noncolonizing  American  in  that  which  has  been, 
for  this  Occidental  of  the  Occident,  one  of  the  most  incon- 
gruous and  unique  enterprises  of  his  history. 

When  one  sallies  forth  to  get  his  bearings  and  orien- 
tation, travelerlike,  after  his  first  dinner  in  a  new  land, 
there  are  signs  enough  of  Yankeedom  to  make  the  native 
of  the  United  States  quite  comfortable. 

It  is  something  to  be  able  to  wander  through  streets 

286 


TRADE  POSSIBILITIES  IN  THE  PHILIPPINES     287 

whose  signs  talk  to  you  of  Babbitt's  soap  and  Boston  garters, 
and  to  feel  again  real  ice  cold  chocolate  soda  water  percolat- 
ing into  your  anatomy  through  a  regulation,  dust  specked 
straw  in  an  all-American  drug  store,  while  your  listless 
eyes  gloat  upon  advertisements  of  Bull  Durham  or  fall 
perchance  upon  the  hirsute  countenances  of  the  Smith  Bros. 
There  are  indeed,  certain  parts  of  Manila,  this  metropolis 
of  our  American  far-flung  battle  line,  11,600  miles  from 
New  York  via  Suez,  with  its  nearly  one  million  of  people 
where,  but  for  the  Spanish  padres,  two-wheeled  sulkies,  and 
an  occasional  touch  of  medievalism  in  an  old  cathedral, 
you  might  easily  feel  that  you  had  dropped  by  mistake 
into  a  city  of  Texas  near  the  Mexican  border. 

The  Americans,  military  or  official,  have  not  been  recreant 
to  their  new  and  gigantic  tasks.  In  less  than  twenty  years 
they  have  brought  to  a  decadent,  belated  land  the  rejuvena- 
tion of  a  scientijfic  and  industrial  new  birth.  They  have 
taken  this  monsoon,  semi-tropical  land  for  which  the  United 
States  paid  $20,000,000  indemnity  to  Spain,  and  have 
touched  it  with  the  magic  wand  of  modernity.  New  and 
broad  highways,  sanitary  improvements,  city  buildings  of 
Western  pattern,  trolley  cars  and  ice  plants,  pure  water 
and  a  system  of  industrial  and  primary  education  hardly 
surpassed  in  Asia.  All  these  things  have  sprung  up  as  in 
the  night  before  the  ever  efficient  genius  of  the  American, 
arch  apostle  of  utilitarian  progress. 

Five  hundred  miles  of  steam  railways  now  carry  the 
population  and  the  products  of  the  soil,  which  are  mainly 
sugar,  hemp,  rice,  cocoanut,  coffee  and  lumber.  These  same 
colonists  have  converted  the  city  of  Manila,  which  only  a 
few  years  ago  served  as  a  dumping  ground  and  sanctuary 
for  grafters  and  criminals  and  the  expatriated  men  and 
women  of  Eastern  Asia,  worse  even  than  any  Levantine 
Port  Said,  into  a  city  of  order  and  cleanliness.  They  have 
carried  out  the  idea  of  the  early  governors,  and  have  placed 
Filipinos  upon  the  Governing  Commission,  teaching  them 
the  fundamental  principles  of  self-government  by  participa- 
tion in  local  authority,  a  thing  which  England  did  not  learn 


288       FOREIGN  TRADE  MARKETS  AND  METHODS 


to  do  until  she  had  been  fifty  years  in  India,  and  then  not 
entirely  at  her  own  unaided  volition. 

The  following  figures  relative  to  population,  exchange, 
gold  reserve  and  principal  exports  have  been  recently 
gathered  by  the  World  Map  Company,  and  will  reveal  the 
basic  facts  required  by  the  world  trader: 


Population,  8,918,000  (1917). 
Exchange,  Par.  1  peso — $0.50  U.  S. 


).4875,  Nov.  18, 1919). 


Principal  Exports 

Hemp 

Copra 

Sugar 

Tobacco 

Total  imports  ($  U.  S.) 
Total  exports  (S  U.  S.) 


1912-1913 


1917-1918 


$23,000,000 

11,700,000 

9,500,000 

5,400,000 


$54,500,000 

9,500,000 

13,300,000 

10,700,000 


$54,550,000 
50,320,000 


$83,800,000 
114,580,000 


During  the  past  five  years  the  products  of  the  Philippines 
have  been  in  great  demand  and  a  total  trade  balance  of 
over  200,000,000  pesos  has  been  built  up  in  favor  of  the 
Islands.  On  August  31,  1919,  the  cash  balance  in  the 
treasury  was  141,181,050  pesos.  The  currency  in  circula- 
tion was  136,674,619  pesos.  On  the  same  date,  in  1918, 
the  treasury  balance  was  169,000,000  pesos  and  the  currency 
in  circulation  126,000,000  pesos. 

The  above  figures  give  the  impression  of  very  favorable 
conditions,  but  while  the  Islands  are  undoubtedly  in  a 
stronger  position  than  before  the  war,  the  situation  is  in 
reality  not  so  favorable  as  statistics  present  it.  The  war 
brought  prosperity,  but  its  ill  effects  are  now  beginning  to 
tell.  The  local  financial  situation  is  uncertain,  and  the 
currency  is  inadequate.  Exchange  with  the  United  States 
is  unsettled,  and  consequently  also  with  other  countries. 
There  is  a  lack  of  cheap  rice,  the  staple  food  of  the  people. 

As  a  result  of  the  war,  the  value  of  imports  from  the 
United  Kingdom,  already  reduced  by  the  tariff  policy  of 


TRADE  POSSIBILITIES  IN  THE  PHILIPPINES       289 

the  United  States,  in  the  Philippines,  to  something  over 
10,000,000  pesos,  has  fallen  off  nearly  50  per  cent.  In  1918 
the  value  of  imports  from  the  United  Kingdom  was  only 
5,528,814  pesos.  Before  the  war,  imports  from  the  United 
Kingdom  consisted  mainly  of  textile  goods  of  finer  counts, 
wider  widths,  and  high  quality,  earthenware,  some  brass 
manufactures,  copper  sheets,  machinery,  paints  and  ship- 
chandlery,  biscuits  and  jams,  some  leather  goods  and 
heavy  chemicals  and  crude  drugs.  During  the  war,  export 
restrictions,  high  freights,  dear  materials  and  heavy  taxes, 
all  contributed  to  lessen  the  quantity  of  goods  imported 
from  the  United  Kingdom.  With  a  return  to  normal  con- 
ditions, provided  there  is  a  material  decline  in  costs,  it 
is  thought  that  the  trade  of  the  United  Kingdom  will 
revive. 

The  American  in  the  Philippines  has  not  feared  to  tackle 
that  most  difficult  of  all  difficult  questions  in  the  Orient 
involving  religion,  and  the  settlement  of  the  issues  relative 
to  the  Friars'  lands  seems  to  meet  with  general  satisfac- 
tion among  people  of  various  classes. 

There  has  also  been  founded  and  equipped  the  University 
of  the  Philippines,  favorably  comparing  with  institutions 
of  this  order  in  the  Orient.  There  have  been  gathered 
one-half  million  children  into  schools  that  are  under  super- 
vision. One  finds  a  first-class  Young  Men's  Christian 
Association  system,  together  with  a  brace  of  missionary 
activities,  including  hostels  and  schools  for  both  boys  and 
girls.  The  Americans  have  also  begun  and  have  accom- 
plished much  in  the  standardization  of  English  as  a  medium 
of  educational  policy  in  the  Orient. 

One  sees  here  advances  in  craftsmanship  and  trade  schools 
that  may  be  studied  with  profit  by  both  Americans  and 
Europeans,  being  examples  of  enterprising  genius,  unique 
in  this  branch  of  educational  training.  For  days,  under 
the  conduct  of  trained  experts  having  in  charge  the  manual 
training  and  trades  schools,  I  visited  the  institutions  which 
are  laying  the  permanent  foundations  for  future  success 
in  the  Philippines.     Designing,  carpentry,  machine  shops, 


290       FOREIGN  TRADE  MARKETS  AND  METHODS 

basket  making  and  domestic  science  are  carried  on  under 
the  most  modern  circumstances  of  machinery  and  method. 
One  sees  almost  every  practical  art,  from  the  dexterous 
stripping  of  the  Tipon-tipon  palm,  to  be  converted  into 
the  weaving  of  a  lunch  basket,  to  the  manufacture  of  an 
automobile  in  which  the  educational  officials  ride  in  their 
tours  of  inspection. 

The  educational  creed  of  the  Islands  is  epitomized  in 
the  words  of  Lowell,  which  the  educational  director  has 
placed  as  a  foreword  in  his  Philippine  Craftsman  and 
incarnated  in  his  working  policy : 

No  man  is  bom  into  the  world  whose  work  is  not  bom  with 
him;  there  is  always  work  and  tools  to  work  withal,  for  those 
who  will  J  and  blessed  are  the  homy  hands  of  toil. 

Although  the  American  occupation  of  the  Philippines 
has  brought  about  advances  that  are  revolutionary  in  their 
beneficial  influence  and  sweep,  the  problems  of  the  Islands 
are  ever  present  in  the  minds  of  the  foreigners  who  are 
either  temporarily  or  permanently  finding  here  their  home. 

One  of  these  problems  arises  from  the  fact  that  the 
islands  are  rich  in  timber  lands,  and  also  contain  fine  pos- 
sibilities for  the  growing  of  such  products  as  rice,  cocoanuts, 
tobacco  and  other  tropical  crops,  but  that,  as  yet  American 
capital  has  found  investment  in  these  lines  to  be  attended 
with  considerable  risk. 

I  talked  with  a  group  of  Americans  who  had  made  a  trip 
to  the  Philippines  especially  for  the  purpose  of  investing 
in  cocoanut  plantations,  but  upon  hearing  of  the  impedi- 
ments attendant  upon  this  tropical  industry,  the  discovery 
and  preparation  of  the  soil,  the  securing  of  the  right  expo- 
sure, the  labor  of  preparing  copra  and  many  other  diffi- 
culties connected  therewith,  abandoned  the  idea  as  imprac- 
ticable. 

A  further  large  problem  facing  prospective  investors  is 
the  problem  of  labor.  If  the  Chinese  could  be  employed 
in  the  Islands,  many  of  the  doubtful  questions  of  tropical 


TRADE  POSSIBILITIES  IN  THE  PHILIPPINES     291 

cultivation  undoubtedly  would  be  solved.  Filipino  labor 
has  not  proved  especially  profitable,  though  modern 
machinery  is  slowly  being  utilized  to  advantage.  The 
Chinese,  however,  are  at  home  upon  Eastern  land,  and 
have  already  turned  the  tide  of  industry  in  the  Malay 
Peninsula  and  Java.  On  the  other  hand,  it  is  thought, 
and  probably  it  is  true,  that  the  introduction  of  Chinese 
labor  in  the  Philippines  would  work  to  the  decided  dis- 
advantage of  the  Filipino,  if  it  did  not  entirely  deprive 
him  of  a  place  in  the  smaller  industries  of  the  islands. 

An  ever-present  difficulty  is  that  of  legislating  at  home 
for  a  people  who  live  nearly  12,000  miles  away.  There 
is  in  America,  and  naturally  enough,  no  such  general  knowl- 
edge, and  no  such  settled  administrative  policy  governing 
colonies,  as  that  which  is  found  connecting  the  British 
Parliament  with  its  Asiatic  dependencies.  The  policy  of 
governing  India,  for  example,  is  in  the  main  a  generally 
conceded  and  settled  one,  going  on  steadily  like  the  English 
Constitution,  more  or  less  regardless  of  viceroys  and  chang- 
ing home  ministries. 

In  the  Philippines,  contrariwise,  the  shifting  of  party 
administrations  at  home  are  inclined  to  be  followed  by 
disturbed  and  uncertain  conditions  there. 

My  visit  to  these  islands  occurred  at  a  time  of  such 
unrest,  due  not  only  to  unknown  or  undetermined  plans 
as  regards  the  best  things  for  these  islands,  but  also  one 
is  bound  to  believe,  to  the  ignorance  of  legislators  con- 
cerning Asiatic  situations  and  peoples.  One  of  the  first 
pieces  of  news  that  greeted  me  upon  arrival  at  Manila, 
was  the  dubious  intelligence  that  the  Government  revenues 
had  been  falling  off  five  hundred  thousand  pesos  a  month 
for  several  months,  and  the  reason  given  by  the  officials 
was  that  a  new  political  administration  at  home,  with  a 
somewhat  different  attitude  toward  the  self-government  of 
the  islands,  was  throwing  out  of  balance  the  whole  system 
of  trade  and  business  conditions.  Without  going  into  the 
merits  or  demerits  of  the  case,  one  could  easily  see  that 
aU  departments  were  being  affected  by  the  change. 


292       FOREIGN  TRADE  MARKETS  AND  METHODS 

The  educational  officials  and  directors  were  feeling  the 
insecurity  of  trying  to  work  out  advance  policies  that  had 
been  made  to  cover  a  period  of  years.  I  talked  with  many 
Filipino  politicians  also,  whose  views  varied,  to  be  sure,  as 
widely  as  most  politicians'  views  vary  in  both  the  East 
and  the  West,  but  regarding  one  question  all  were  more 
or  less  agreed — that  question  was,  "the  Philippines  for  the 
Filipinos."  The  attitude  was  not  unlike  that  which  one 
finds  to-day  in  the  new  nationalism  of  Egypt,  India,  and 
in  fact,  in  the  political  attitude  of  every  subject  race  in 
the  Orient. 

One  prominent  native  official  declared: 

It  (self-government)  may  come  to  our  islands  in  eight  months; 
it  may  linger  for  a  year  or  more;  but  our  people  about  Manila 
at  least  are  thrilled  with  the  expectation  of  some  form  of 
independent  self-control  of  the  country  on  the  part  of  the  native 
inhabitants. 

One  who  has  not  been  '*on  the  ground"  cannot  possibly 
conceive  of  the  changes  in  sentiment  that  can  be  brought 
about  amongst  an  Oriental  people  by  that  which  may  seem 
to  be,  at  the  base  of  home  government,  a  mere  reiteration 
of  policy.  No  one,  I  am  sure,  if  he  had  not  seen  it  with 
his  own  eyes,  could  appreciate  the  precarious  unsettledness 
in  which  the  discussions  in  Congress  regarding  the  Jones 
bill  threw  the  foreign  as  well  as  native  population  in  the 
Philippines. 

There  are  many  misunderstandings  growing  out  of  dis- 
tance and  the  contrasts  between  the  mental  point  of  view 
of  America  and  Asia,  but  the  problem  which  is  always 
uppermost  both  in  the  United  States  and  in  these  islands 
is  associated  with  the  self-independence  of  these  people, 
whether  or  when  it  should  come  and  by  what  means  it 
should  be  brought  about.  We  are  told  that  a  certain  diplo- 
mat who  was  closely  associated  with  President  McKinley  in 
1898,  stated  that  the  Philippines  were  annexed  because 
no  one  could  suggest  any  other  feasible  way  of  dealing 
with  them. 


TRADE  POSSIBILITIES  IN  THE  PHILIPPINES       293 

As  far  as  one  could  learn,  from  association  with,  those 
who  have  reason  to  know  most  accurately  the  temper  and 
life  of  these  people,  there  is  but  one  opinion  at  present 
amongst  most  of  the  officials  and  American  colonists  in  the 
islan(^.  This  opinion  is  to  the  effect  that  for  the  present, 
and  for  a  long  time  to  come,  the  United  States  must  remain 
at  the  helm  of  government  in  order  to  save  the  islanders 
from  themselves  or  to  obviate  an  exchange  in  the  islands, 
of  government  by  the  United  States,  to  government  by 
some  European  nation,  or  by  Japan.  There  is  little  doubt 
but  that  the  wilder  tribes,  which  are  by  no  means  peaceful 
as  frequent  outbreaks  jDrove,  because  of  their  powerful 
fighting  qualities  would  overthrow  any  Filipino  govern- 
ment that  might  be  left  unprotected  by  Uncle  Sam's  troops, 
making  intervention  by  some  stronger  power  a  veritable 
necessity. 

Those  who  have  contrasted  the  character  and  ability  of 
the  East  Indians,  for  example,  and  their  ability  to  rule 
themselves,  with  the  heterogeneous  views  and  capabilities 
of  these  island  children,  are  generally  united  in  their 
opinion  that  the  intelligent  Indian  should  be  given  self- 
government  ahead  of  the  Filipino.  On  the  contrary,  the 
American  Government  is  based  on  a  conception  of  freedom 
in  a  way  that  British  government  and  colonization  cannot 
fully  understand  or  sympathetically  appreciate.  The 
United  States,  to  be  consistent,  therefore,  must  take  the 
position  that  the  general  principles  which  control  at  home 
must  be  given,  sooner  or  later,  the  opportunity  to  express 
themselves  in  each  of  its  tributary  states  or  dependencies. 
In  other  words,  the  Philippines  furnish  the  somewhat 
unique  meeting  ground  between  ideal  theories  and  prac- 
tical politics.  Here  we  have  a  melting-pot  in  which  are 
seething  the  diverse  problems  known  in  a  half  dozen 
Asiatic  areas,  combined  with  the  multitude  of  western 
administrative  republican  ideas  and  forces  which  have  not 
yet  been  brought  to  full  fruition  in  America. 

The  Federal  official  finds  himself  more  or  less  distracted 
between  his  practical  desire  to  follow  England  with  an 


294       FOREIGN  TRADE  MARKETS  AND  METHODS 

iron  hand  of  authoritative  rulership,  and  his  own  inherent 
temperament  and  training  which  would  give  the  "square 
deal ' '  of  statehood  to  these  people.  Add  to  these  conflicting 
sentiments  a  constant  stirring  of  the  caldron  by  the  ever 
changing  partisan  politics  at  home,  and  you  have  the 
political  dilemma  of  the  Philippine  Islands, 

The  end  is  not  yet,  and  in  fact  the  end  cannot  be 
prophesied  with  any  accuracy.  In  the  way  of  the  English- 
man, the  best  we  seem  to  be  able  to  do  at  present  is  to 
play  the  game  of  civilizing  and  modernizing  in  accordance 
with  the  plan  already  so  wisely  and  successfully  in- 
augurated, and  trust  in  the  "muddling  through"  idea, 
assisted  by  developments  which  at  present  can  only  be 
guessed.  Of  one  thing  we  are  sure — the  United  States  has 
put  its  hand  to  the  plow  and  it  cannot  turn  back.  In  all 
probability  there  are  more  problems  ahead  than  those  which 
have  already  been  encountered.  It  is  a  great  job,  and  a  fine 
one,  but  when  it  is  eventually  accomplished,  one  can  have 
little  doubt  but  that  the  islander  of  these  southern  tropical 
seas  will  have  grown  to  somewhat  of  the  stature  and  the 
independent  individuality  of  the  freeborn  American,  and 
that  a  new  sphere  of  world  trade  shall  have  been  opened. 


CHAPTER  XIX 
AMERICAN  TRADE  IN  INDIA 

We  are  accustomed  to  think  of  the  Oriental  as  a  passive, 
slow  moving,  dreamy  creature,  satisfied  with  his  own 
antiquity,  standing  aloof  from  the  modern  world  with  its 
aggressive  desires  and  achievements,  turning  his  gaze  into 
his  soul. 

It  is,  therefore,  with  genuine  surprise  that  the  Westerner, 
who  to-day  sails  "East  of  Suez"  finds  virtually  the  entire 
East  coming  with  a  rush  into  the  Western  world. 

While  riding  on  the  back  of  a  camel  on  the  edge  of  the 
Sahara  desert  not  far  from  old  Biskra,  I  heard  a  whirring 
overhead,  and  looking  up  I  saw  an  aeroplane  of  the  French 
army,  wheeling  over  the  black  tents  of  the  Bedouins.  The 
Moslem  pilgrims  are  no  longer  obliged  to  go  to  Mecca  by 
camel  caravan,  but  are  whirled  there  by  express  trains, 
while  the  electric  light  is  said  to  burn  above  the  tomb 
of  the  Mohammedan  prophet  at  Medina. 

I  found  the  Gaekwar  of  Baroda  in  India  installing 
cinematograph  machines  through  the  rural  sections  of  the 
native  state  of  Baroda,  and  going  incognito  to  sit  in  a  back 
seat  and  hear  the  expressions  of  the  Indian  cultivators, 
as  they  witnessed  the  modern  methods  of  farming  on  the 
prairies  of  Kansas  and  Nebraska. 

China  is  not  behind.  The  land  which  we  have  so  long 
connected  with  an  antediluvian  people,  remote  from  our 
civilization  as  in  the  days  of  Marco  Polo,  has  now  estab- 
lished a  parliament,  accepted  Western  business  methods  in 
many  port  cities,  developed  reformers,  revolutionized  her 
school  system  and  even  reports  the  doings  of  sufcagettes 
in  Peking. 

295 


296       FOREIGN  TRADE  MARKETS  AND  METHODS 

Japan  in  her  victorious  conflict  with  Russia  was  very 
largely  responsible  in  starting  this  change  which  has 
reached  the  Orient  from  Tokyo  to  Morocco,  and  Japanese 
progress  in  all  forms  of  enlightenment  is  the  order  of  the 
day.  A  single  intimation  of  this  is  revealed  in  the  fact 
that  98  per  cent  of  the  male  population  and  97  per  cent 
of  the  women  of  Japan  can  read  and  write. 

Among  all  Oriental  countries,  India  is  perhaps  farthest 
away  from  the  United  States  as  far  as  intimate  knowledge 
of  conditions  in  that  great  country  is  concerned.  Here  is 
a  land  of  marvelous  opportunity  with  a  population  of 
315,000,000 — as  large  as  Europe  without  Russia,  and  in- 
creasing at  the  rate  of  250,000  per  month.  The  land  is  a 
melting  pot  of  racial  mixture,  there  being  41  races  and  21 
languages  and  dialects  in  every  day  use.  Its  annual  com- 
merce with  Great  Britain  alone  amounted  in  normal  times 
before  the  war  to  more  than  $400,000,000. 

India  has  over  40,000  miles  of  railroad,  which  carry 
yearly  350,000,000  passengers,  and  65,000,000  tons  of  goods 
and  merchandise.  Here  modernity  is  at  work,  as  evidence 
is  found  in  India's  big  cities  equipped  with  modern  con- 
veniences, street  railways,  telegraph,  telephone,  electricity, 
sanitation,  hotels  and  commercial  houses,  and  with  a  slow 
but  certain  acceptance  of  the  chief  business  and  educational 
appliances  of  the  Western  world. 

All  this  vast  land  is  ruled  by  Great  Britain,  and  under 
pre-war  conditions,  with  not  more  than  100,000  British 
troops  and  about  1500  civil  servants  and  school  teachers. 

Political  unrest  has  been  evidenced  in  India  in  different 
sections  and  this  probably  is  inevitable  amongst  a  people 
ruled  over  by  another  nation.  The  concessions  to  East 
Indians  given  by  Great  Britain  in  the  Legislative  Councils 
and  Assemblies,  and  the  willingness  shown  to  share  more 
and  more  the  Government  with  the  natives  has  proved  the 
wisdom  of  the  British  colonizer.  There  has  been  lately 
a  rather  serious  difficulty  in  the  Punjab,  brought  about  by 
what  seems  on  the  surface  to  be  a  somewhat  radical  move 
on  the  part  of  a  British  military  officer  in  firing  into  a 


AMERICAN  TRADE  IN  INDIA  297 

group  of  natives  who  were  suspected  of  revolutionary  and 
disloyal  tendencies.  In  this,  as  in  other  East  Indian  troubles, 
there  wiU  be  doubtless  a  settlement  in  which  the  native 
population  will  gain  somewhat  more  of  consideration  on 
the  part  of  the  British. 

The  war  has  had  its  results  in  India  and  among  them 
have  been  the  new  trade  routes  opened  and  the  export 
and  import  activities  by  which  the  United  States  has 
revealed  her  interest  in  this  old  country. 

Previous  to  1914,  despite  the  presence  of  our  diplomatic 
and  consular  offices  in  that  country,  an  American  travel- 
ing in  that  part  of  the  world  would  first  get  the  impression 
that  Indian  trade  was  for  the  Briton  only.  In  the  decade 
before  the  "World  War,  however,  German  commerce  and 
propaganda  increased  notably  in  India. 

Since  the  war  the  United  States  and  Japan  have  been 
coming  to  the  front  in  Indian  trade.  According  to  a 
recent  London  report  the  place  of  the  Central  Powers  has 
been  taken  by  the  United  States  so  far  as  iron  and  steel, 
machinery,  hardware  and  instruments  are  concerned. 
Japan  has  taken  trade  heretofore  held  by  the  Central 
Powers  in  such  articles  as  electrical  accessories,  copper, 
paper,  glassware,  textiles,  beer  and  clothing.  The  bazaar 
trade  in  cheap,  showy  goods  has  been  largely  captured  by 
Japan. 

The  primary  reason  for  the  increased  shipments  of  Ameri- 
can manufactured  goods  to  India  has  been  the  inability 
of  the  established  British  exporters  to  supply  the  market 
owing  to  war  conditions.  Our  improved  shipping  facilities 
have  contributed  largely  to  the  expansion. 

There  is  no  doubt  but  that  American  competition  in 
India  has  come  to  stay.  A  determined  American  effort  is 
being  made  to  secure  a  large  share  of  the  trade  of  this 
valuable  market  in  steel  and  steel  work,  machinery  of  all 
kinds,  including  machine  tools,  mill  stores  and  hardware, 
canned  provisions,  motor  cars,  lorries  and  cycles,  and  lum- 
ber. 

These  new  trade  conditions  in  India  are  brought  out 


298       FOREIGN  TRADE  MARKETS  AND  METHODS 

rather  explicitly  in  a  blue-book  presented  to  the  British 
Parliament  in  December  last  by  T.  M.  Ainscough,  British 
Trade  Commissioner  in  India.  It  is  a  work  intended  to 
arouse  Britishers  relative  to  the  need  of  adopting  new 
methods  and  giving  more  thoroughgoing  attention  to  their 
trade  interests  in  this  vast  Empire.  We  quote  briefly  from 
this  report: 

Before  the  war  there  were  practically  no  American  merchant 
importers  of  high  standing  in  India.  The  last  few  years,  how- 
ever, have  witnessed  the  opening  of  a  few  large  firms  which 
are  already  doing  a  considerable  trade.  For  instance  the  United 
States  Steel  Products  Export  Company  and  the  branches  of 
Grace  Brothers  have  established  themselves  in  India.  The  latter 
are  already  doing  business  on  a  large  scale,  both  as  regards 
imports,  exports,  and  the  management  of  local  industries.  Much 
greater  facilities  than  in  the  past  are  being  given  by  American 
banks  and  shipping  companies  to  the  exj^ort  trade,  and  every 
effort  is  being  made  to  study  the  requirements  of  the  Indian 
market  in  a  most  remarkable  way.  In  the  motor  car  trade  for 
instance,  the  policy  of  standardization  of  cars  and  spare  parts, 
the  personal  attention  given  to  importers  by  representatives  and 
mechanics,  and  the  allowances*  for  advertising  and  general  propa- 
ganda work  have  had  a  most  favorable  effect  on  the  sales. 
American  houses  are  often  much  more  generous  in  their  agency 
terms  than  their  United  Kingdom  rivals.  In  the  provision  trade 
the  type  of  container  used,  the  attractive  labels  and  get-up,  and 
the  general  care  given  to  packing  has  gone  a  long  way  to  account 
for  the  phenomenal  expansion  in  the  business. 

The  broad  general  fact  is  that  the  circumstances  of  the  War 
and  the  relative  measure  of  exhaustion  of  Great  Britain  after 
four  years  of  conflict,  and  of  the  United  States,  with  a  compara- 
tively brief  experience  as  a  combatant,  gave  the  latter  a  greater 
advantage  in  industrial  and  commercial  activity,  of  which  she 
has  taken  the  fullest  opportunity  in  the  Indian  market.  Her 
competition  there  has  come  to  stay.  It  is  impossible,  says  Mr. 
Ainscough,  even  to  estimate  the  probable  future  success  of 
American  firms  when  the  usual  United  Kingdom  suppliers,  now 
hampered  by  labor  troubles  and  difficulties  of  all  kinds,  are  in 
a  position  to  quote  nonnal  prices  and  deliveries,  and  when  the 
usual  channels  of  trade  are  fully  opened  up. 


AMERICAN  TRADE  IN  INDIA  299 

The  Trade  Commissioner  sums  up  the  more  unmediate 
lesson  of  the  situation  from  the  British  point  of  view: 

Many  United  Kingdom-  makers  and  export  houses,  prior  to 
1914,  considered  that  it  was  a  waste  of  time  and  money  to  leave 
London,  as  they  were  able  to  secure  all  the  orders  they  wanted 
from  the  purchasing  agent  at  home.  This  policy,  although  not 
progressive,  was  understandable  so  long  as  we  retained  the  virtual 
monopoly  of  the  market.  India  to-day  must  be  considered  as 
a  highly  competitive  market,  and  requires  to  be  treated  with  as 
great  and  painstaking  attention  as  any  other  market  where  we 
may  be  struggling  to  secure  a  fair  share  of  the  trade.  Assuming 
that  our  industrialists  are  in  a  position  to  quote  competitive 
qualities,  prices  and  deliveries,  the  only  way  successfully  to  meet 
American  competition  is  to  be  represented  actively  by  a  trained 
staff  in  India,  whether  by  the  maintenance  of  the  exporters'  own 
branches  and  distributing  organization,  or  by  the  employment  of 
energetic  agents  aided  by  salesmen  and  experts  from  the  home 
works. 

The  large  expansion  of  Japanese  activity  in  India  has 
been  principally  through  travelers  and  business  men  from 
the  Island  Empire  of  the  Far  East.  In  1911  there  were 
only  32  male  Japanese  in  India.  To-day  the  number 
exceeds  2000.  One  finds  Japanese  retail  stores  in  nearly 
every  large  town  in  India  and  even  in  the  most  remote 
parts  of  the  countries  Japanese  workers  will  be  found. 
The  Japanese  are  taking  a  prominent  position  as  general 
distributors  in  India  of  imports  from  all  over  the  world 
and  as  shippers  of  Indian  produce.  In  spite  of  complaints 
on  the  part  of  the  people  of  India  regarding  the  Japanese 
methods  and  practices,  such  as  mistakes  in  drafts  and 
documents,  late  arrivals  of  goods,  and  complaints  concern- 
ing the  quality  of  second  shipments,  the  Japanese  organiza- 
tion abroad  works  as  one  unit  and  is  devoted  to  the  national 
Japanese  cause.  This  national  team  play  assists  in  keeping 
out  competing  interests. 

It  is  thought  that  Japanese  competition  with  Great 
Britain  is  likely  to  be  most  permanent  and  persistent  in 
Great   Britain's   staple   trade   in   India,    that   of   cotton 


300       FOREIGN  TRADE  MARKETS  AND  METHODS 

yarns  and  piece  goods.  The  scale  of  working  expenses  of 
the  Japanese,  together  with  their  individual  industry 
presents  a  strong  competitive  element,  while  their  willing- 
ness to  live  in  remote  sections,  under  conditions  impossible 
to  an  Anglo-Saxon,  and  their  understanding  of  the  subtle- 
ties of  the  Oriental  mind,  make  the  Japanese  formidable 
rivals  of  Great  Britain  and  the  United  States  in  connection 
with  Indian  business. 

Relative  to  the  conditions  which  Britishers  as  well  as 
United  States  traders  must  meet  in  India,  the  following 
paragraph  quoted  from  the  British  Trade  Commissioner  in 
India  is  illuminating: 

There  is  a  tendency  among  many  of  our  British  produce  firms 
to  take  the  line  of  least  resistance.  The  social  amenities  are 
pleasanter  at  the  ports,  and  the  necessity  of  keeping  a  vigilant 
eye  on  conditions,  prospects,  and  prices  in  the  producing  districts 
was  not  apparent  in  the  past.  In  consequence,  they  (the  British) 
have  usually  confined  their  activities  to  Calcutta,  Bombay, 
Karachi,  and  Madras,  and  have  relied  upon  their  banians  and 
brokers  to  keep  them  informed  of  local  conditions  up  country. 
The  result  is  that,  speaking  generally,  the  Continental  firms, 
with  their  own  depots  and  European  traveling  agents  in  the 
districts,  are  infinitely  better  informed  on  crop  prospects  and 
can  make  their  own  estimates  with  a  reasonable  degTee  of 
accuracy.  The  same  scientific  methods  are  now  being  adopted 
by  the  Japanese — there  are  only  two  remedies  open  to  the  British 
houses.  They  must  either  perfect  their  own  organization,  dis- 
card the  old  ideas  and  methods,  and  make  a  bid  for  the  trade 
in  a  manner  in  keeping  with  the  times,  or  they  should  relinquish 
the  business.  Up  to  the  date  of  writing  their  sole  efforts  seem 
to  have  been  directed  to  appeals  to  Government  through  the 
Chambers  of  Commerce  for  restriction  on  foreign  competition, 
so  that  they  might  still  go  on  undisturbed  in  the  old  inefficient 
haphazard  way. 

That  the  American  manufacturer  and  trader  may  get  an 
idea  of  the  lines  along  which  East  Indian  trade  is  now 
being  developed  particularly,  we  quote  from  the  Commerce 
Report  of  December  2d,  Bureau  of  Foreign  and  Domestic 


AMERICAN  TRADE  IN  INDIA  301 

Commerce,  for  four  months  ending  July,  1919,  as  compared 
with  the  corresponding  period  of  the  preceding  year. 

The  quantity  of  cotton  piece  goods  imported  into  India  de- 
creased by  218,000,000  yards  or  50  per  cent  to  219,000,000  yards 
and  the  value  was  less  by  44  per  cent.  The  value  of  cotton 
twist  and  yam  imported  decreased  by  $6,156,123  to  $2,996,791, 
of  articles  imported  by  post  by  $2,342,084,  of  woolen  piece  goods 
by  $1,069,332,  of  salt  by  $1,745,452,  of  raw  cotton  by  $1,593,941, 
and  of  matches  by  $924,960. 

Imports  of  wheat  increased  by  $6,798,177,  sugar  16  DS  and 
above  by  $534,341,  kerosene  oil  by  $3,129,160,  lubricating  oils 
by  $1,671,165,  raw  silk  by  $803,946,  motor  cars  and  motor  cycles 
by  $2,139,313,  hardware  by  $1,465,790,  electrical  machinery  by 
$1,286,378,  electrical  instruments  by  $613,503,  jute  mill  machin- 
ery by  $916,631,  sheets"  and  plates  (iron  or  steel)  by  $3,729,362, 
and  silk  piece  goods  by  $1,222,789. 

Under  exports  the  quantity  of  rice  not  in  the  husk  shipped 
during  the  four  months  decreased  by  692,574  tons  to  155,711  tons, 
and  the  value  by  $21,130,668  to  $7,588,172,  while  wheat  showed 
a  decrease  of  269,899  tons  to  2701  tons  in  quantity  and  of  $11,- 
881,772  to  $210,557  in  value.  The  quantity  of  raw  jute  exported 
showed  a  decrease  of  20,460  tons  or  nearly  15  per  cent. 

The  value  of  coffee  exported  increased  by  $2,169,810,  of  cotton 
twist  by  $10,612,215,  of  piece  goods  by  $5,172,765,  of  raw  hides 
by  $7,414,924,  of  raw  skins  by  $10,925,294,  of  skins  (tanned) 
by  $4,635,504,  of  hides  (tanned)  by  $3,821,500,  and  of  seeds  by 
$24,588,153,  while  the  value  of  barley  decreased  by  $4,940,471, 
of  grain  and  maize  by  $5,993,257,  of  castor  seed  by  $1,799,632, 
of  black  tea  by  $1,709,115,  of  gunny  cloth  by  $6,744,816,  and 
of  gunny  bags  by  $2,245,728. 

In  order  to  break  into  successful  trade  with  an  Oriental 
nation  like  India,  there  are  two  things  to  be  considered — 
the  commercial  and  the  mental  qualifications.  The  latter 
is  no  less  important  than  the  knowledge  of  products  and 
the  export  and  import  markets  suggested  above. 

Wliat  kind  of  people  inhabit  this  vast  peninsula?  What 
are  their  needs  and  points  of  view?  How  do  they  like  to 
do  business?    What  is  the  first  thing  for  the  manufacturer 


302       FOREIGN  TRADE  MARKETS  AND  METHODS 

or  exporter  to  undertake?  These  are  questions  which  the 
American  foreign  trader  must  be  prepared  to  answer  by 
actual  knowledge  if  he  expects  to  do  more  than  make  a 
feint  of  trading  with  India.  It  is  no  easy  task  to  get  the 
mental  view  point  of  the  Oriental.  These  people  are  our 
antipodes  in  more  senses  than  one.  You  may  think  you 
know  an  Oriental  and  be  convinced  that  at  last  you  have 
really  discovered  him  when  suddenly  the  next  one  you  meet 
reveals  characteristics  that  upset  utterly  all  your  previous 
calculations  and  estimates.  The  only  way  to  be  quite  cer- 
tain that  you  know  an  East  Indian  is  not  to  meet  another 
one.  There  are  things,  however,  that  we  can  know  and 
important  things  for  the  trader  to  consider. 

He  must  remember  that  approximately  two-thirds  of  the 
population  of  India  are  Hindus  and  that  the  other  one-third 
approximately  are  Mohammedans.  Before  living  long  in 
India  he  will  find  that  customs  differ  between  these  two 
religious  sects,  and  religion  enters  into  trade  as  well  as 
into  every  department  of  East  Indian  life.  It  would  be 
an  anachronism,  for  example,  for  a  Hindu  whose  religion 
has  taught  him  that  a  cow  was  sacred,  to  have  anything 
to  do  with  the  trade  of  hides  and  skins.  Therefore,  Moham- 
medans and  not  Hindus  are  engaged  in  this  latter  industry. 
Among  the  Hindus  a  shoemaker  occupies  one  of  the  lowest 
positions  in  the  social  scale.  The  Mohammedan,  on  the 
other  hand,  has  no  such  prejudices,  but  the  rules  of  the 
Koran  against  drinking  spirituous  liquors  and  the  attitude 
'toward  social  questions  have  to  be  considered. 

It  must  be  remembered  also  that  at  the  summit  of  East 
Indian  society  are  educated  and  cultivated  men,  many  of 
whom  are  getting  a  voice  politically  in  the  legislative 
assemblies  and  otherwise.  Below  these  East  Indians  of 
intelligence  and  culture,  without  much  of  a  middle  class, 
are  the  ignorant  and  in  many  cases  impoverished  millions, 
over-ridden  and  kept  down  by  their  caste  system  and  as 
impotent  for  great  leadership  as  are  the  South  American 
cholos  and  Andean  Indians,  or  the  coolies  of  China.  In 
this  melting-pot   also  must  be  noted  the  Eurasians  and 


AMERICAN  TRADE  IN  INDIA  303 

Anglo-Indians,  racial  strains  produced  by  mixed  marriages 
between  Orientals  and  Occidentals. 

Then  there  are  the  Parsee  merchants  who  have  been 
called  the  ' '  Jews  of  India. ' '  The  American  trader  who  has 
come  in  contact  with  these  latter  business  men  in  Calcutta 
or  Bombay  has  obtained  a  new  idea  of  the  ability  of  the  East 
Indian  to  do  business  along  practical  and  successful  lines. 

Methods  of  trade  here,  as  in  all  other  countries  where  it 
is  "always  afternoon,"  must  be  suited  to  the  climate  as 
well  as  to  the  customs  of  the  people. 

The  following  description  is  given  by  one  of  the  repre- 
sentatives of  Grace  Bros.  (India),  Ltd.,  concerning  the 
purchase  of  hides  and  skins  in  this  country. 

The  hides  and  skins  come  into  the  bazaar  from  the  railroad 
station  in  bundles,  all  assortments  and  classes  mixed  up,  and 
although  the  buyer  is  permitted  to  assort  the  hides  before  they 
are  bought,  it  is  most  difficult  to  bring  the  ideas  of  the  seller 
down  to  the  proper  market  level,  and  one  has  to  talk  for  hours 
and  hours  in  Hindustani  till  the  seller  is  convinced  that  he  can- 
not get  another  cent  out  of  you.  Talking  is  a  great  stunt  in 
India,  and  it  is  marvelous  how  much  time  is  wasted  over  it — 
and  in  this  business  it  is  the  head  Munshi,  who  has  to  do  a  lot 
of  the  talking  and  prepare  the  way  for  his  'Sahib'  (Sahib  is  the 
Hindustani  title  given  to  a  European)  who  has  neither  the  time 
nor  the  inclination  to  discuss  what  would  have  happened  if — 
etc.  This  discussion  must  take  place  before  business  commences 
and  the  Head  Munshi  is  very  useful  in  this"  respect ;  it  is  further- 
more a  part  of  the  latter's  duty  to  make  the  seller  understand 
that  it  is  not  at  all  likely  that  his  Sahib  will  buy  the  hides  or 
skins  in  question,  but  if  the  unexpected  should  happen  which 
would  mean  that  the  Sahib  is  in  a  'benevolent'  mood  at  that 
moment,  the  seller  may  consider  himself  very  fortunate. 

After  all  these  preparations  have  been  made  the  Sahib  is 
asked  to  appear,  and  when  he  arrives  he  is  welcomed  by  the 
'Arrathdar'  as  a  long  lost  brother,  and  is  bombarded  with  ques- 
tions by  this  'gentleman  as  to  his  own  health,  and  that  of  his 
"wife  (he  may  not  necessarily  have  one)  and  family,  although  the 
parties  may  have  separated  the  day  before  as  deadly  enemies 
owing  to  the  impossibility  of  being  able  to  come  to  terms. 

A  seat  is  offered  to  the  buyer,  but  it  would  be  fatal  for  him 


304       FOREIGN  TRADE  MARKETS  AND  METHODS 

to  commence  talking  'shop'  straight  away,  as  in  all  probability 
it  would  increase  the  ideas  of  the  seller  by  at  least  10  per  cent, 
therefore,  the  Sahib  has  to  wait  till  the  'Arrathdar'  is  ready  to 
discuss  the  business  in  hand,  and  as  the  same  is  generally  rather 
slow  to  take  up  the  subject,  a  good  amount  of  time  is  wasted. 
When  eventually  one  does  get  down  to  business  and  the  bargain- 
ing commences,  'Allah'  (all  hide  dealers  are  Mohammedans)  is 
brought  up  to  witness  that  a  frightful  amount  of  money  is  being 
lost,  and  the  other  side  regrets  this  immensely,  but  on  the  other 
hand  cannot  help  it  as  the  Sahib  will  lose  an  equal  amount  or 
more;  neither  side  believes  a  word  of  what  is  being  said,  but 
this  is  all  part  of  the  'game.'  Eventually,  if  the  two  parties 
come  to  terms,  the  departure  of  the  Sahib  takes  places  in  the 
same  ceremonious  way  as  he  arrived,  and  the  'Arrathdar'  finally 
shakes  hands  with  him  and  wishes  him  all  sorts  of  good  things; 
if,  on  the  other  hand,  business  does  not  result,  the  parting  is 
not  at  all  friendly,  and  the  buyer  has  to  wait  till  the  next  day, 
before  he  can  approach  the  'arrathdar'  on  the  same  subject  again. 

A  few  rules  for  the  American  foreign  trader  or  salesman 
doing  business  in  India  are  suggested: 

First:  Don't  try  to  hurry  the  East  Indian!  Kipling's 
verse  is  apropos : 

Now  it  is  not  good  for  the  Christian's  health 
To  hustle  the  Aryan  brown. 

For  the  Christian  riles 

And  the  Aryan  smiles 
And  he  weareth  the  Christian  down; 

And  the  end  of  the  fight 

Is  a  tombstone  white 
With  the  name  of  the  late  deceased, 

And  the  epitaph  drear; 

"A  fool  lies  here 
Who  tried  to  hustle  the  East." 

American  "hustle"  and  "efficiency"  with  the  slogan 
"Do  it  now"  is  about  as  useless  as  trying  to  pour  water 
in  a  frog's  face  to  drown  it,  when  applied  to  the  methods 
of  officials  in  the  Far  East.  One  day  a  bustling,  energetic 
American  came  into  the  office  of  the  American  Consul  at 


AMERICAN  TRADE  IN  INDIA  305 

Shanghai,  and  announced  that  he  was  a  representative  of 
one  of  the  big  locomotive  works  in  America,  and  had  come 
out  to  finish  some  contracts  with  the  Chinese  Imperial  Rail- 
way, He  found  he  could  get  an  introduction  to  the  Gen- 
eral Manager  of  the  Railways  through  the  Consul,  and 
even  that  had  dragged  on  for  more  time  than  he  thought 
necessary.  He  had  booked  his  passage  home  by  a  steamer 
leaving  Shanghai  in  two  weeks,  and  expected  to  fill  his 
contracts  and  see  a  little  of  Cliina  in  the  meantime.  When 
the  Consul  told  him  it  was  impossible  to  sail  by  that 
steamer,  he  was  scornful,  then  sarcastic.  "You've  been 
here  too  long.  Consul,  you  have  forgotten  how  we  do  things 
back  home.  I'm  an  American  and  I  do  business  in  the 
American  way.  I  '11  have  those  contracts  in  my  pocket  and 
sail  on  the  Manchuria. ' ' 

The  Consul  smiled  and  said  "WeU — you  are  going  to 
meet  His  Excellency  to-day.  Stop  in  on  your  way  back 
and  tell  me  what  you  have  done." 

The  optimistic  American  went  to  his  appointment  and 
in  about  three  hours  a  rather  dejected,  sullen  man  appeared 
in  the  doorway  of  the  Consul's  office.  "Well,"  said  the 
Consul,  "everything  finished,  I  presume.  Got  the  con- 
tracts, of  course,  sure  you  haven 't  built  the  road  already  ? ' ' 

The  man  chewed  his  unlit  cigar  for  a  moment,  then  he 
laughed,  "Got  nothing,"  he  said,  "except  an  invitation  to 
dinner  three  weeks  from  to-morrow  night ! ' ' 

The  man  was  in  Shanghai  eleven  months. 

Second:  Remember  that  the  East  Indians  of  the  upper 
castes  particularly  are  not  lacking  in  intelligence.  The 
Bengali-Brahmins  are  probably  not  surpassed  by  any 
nationality  in  intellectuality. 

Third :  Leave  your  religious  prejudices  behind  when  you 
enter  into  trade  and  commercial  relations  with  India. 

Fourth:  Get  into  touch  with  some  American  concern 
that  is  doing  business  in  India  and  save  yourself  many 
initial  mistakes.  For  example,  although  85  per  cent  of  the 
Indian  population  is  engaged  in  agriculture,  the  problems 
of  farm  machinery  and  the  fertilization  of  land  are  very 


306       FOREIGN  TRADE  MARKETS  AND  METHODS 

great  ones.  This  is  due  in  part  to  the  conservatism  of  the 
inland  cultivators  who  are  slow  to  change,  and  also  in 
certain  parts  of  India  to  the  small  farms  which  do  not 
lend  themselves  to  modern  implements  especially  such 
things  as  steam-plows,  tractors,  etc.  Poverty  of  the  Indian 
farmer  is  also  a  handicap  to  this  trade.  The  fertilizing 
problem  is  made  difficult  because  the  manure  in  this  country 
is  used  largely,  and  necessarily  so,  for  fuel. 

Fifth :  Have  patience  and  be  willing  to  lay  firm  founda- 
tions for  the  future.  In  India  there  seems  to  be  a  settled 
conviction  that  there  is  unlimited  time  for  Providence  to 
accomplish  its  purposes. 

It  is  estimated  that  the  United  States  is  supplying  from 
ten  to  twelve  per  cent  of  the  imports  of  India.  Before 
the  war  the  United  States  supplied  only  2.6  per  cent. 

The  exports  from  the  United  States  in  1920  to  India 
were  practically  ten  times  as  much  in  value  as  in  the 
year  immediately  preceding  the  war,  the  total  value  of 
our  exports  to  India  having  grown  from  $10,379,000  in 
1914,  to  $99,828,000  in  1920,  and  while  the  1921  exports 
to  that  country  show  a  decline,  as  they  do  to  all  other 
parts  of  the  world,  they  will  be  for  the  current  year 
approximately  six  times  as  much  as  in  the  year  imme- 
diately preceding  the  war. 

It  is  well  for  the  American  trader  to  note  that 
India  is  awakening  rapidly  both  as  to  economic  and  material 
progress.  The  urge  of  economic  necessity  is  upon  her. 
The  war  has  helped  to  break  out  a  window  for  India  into 
the  wide  world.  She  will  never  be  content  again  to  live 
merely  on  the  shores  of  the  Ganges.  The  United  States 
has  products  and  manufactures  India  needs  and  must  have. 
Now  is  the  acceptable  time  to  enter  Indian  markets.  For 
the  study  of  India  and  India's  wants  only  intelligent 
agents  should  be  sent  out ;  only  men  who  can  adapt  them- 
selves to  customs,  strange  and  often  mysterious.  Already 
the  United  States  has  a  foothold  in  sections  of  the  East  In- 
dian Empire.  The  future  of  our  trade  depends  upon  one's 
knowing  and  following  the  rules  of  this  foreign  trade  game. 


CHAPTER   XX 
CAN  TRADE  WESTERNIZE  ASIA? 

The  East  bowed  low  before  the  blast, 

In  patient,  deep  disdain; 

She  let  the  legions  thunder  past, 

And  plunged  in  thought  again. — Matthew  Arnold. 

Foreign  trade  has  interested  itself  in  the  Orient  because 
the  majority  of  the  human  race  dwells  in  Asia,  the  largest 
of  the  continents.  Asia  is  numerically  tremendous  with  her 
nine  hundred  millions  of  population,  four  times  the  popula- 
tion of  Europe,  forty-one  times  the  size  of  France  and  the 
sphere  of  activity  of  more  than  half  the  population  of  the 
globe.  Although  Asia  has  never  been  known  as  containing 
warrior  races,  it  is  conservatively  estimated  that  she  can 
muster  one  hundred  millions  of  fighting  men,  while  the 
warrior  nations  of  India  alone  outnumber  those  of  the 
combined  nations  who  speak  English. 

The  strategic  significance  in  the  history  and  trade  of 
nations  of  the  Asiatic  races,  is  not  generally  realized.  Asia's 
struggle  with  Europe  has  lasted  two  thousand  years  and 
has  been  the  binding  thread  of  history;  her  trade  with 
Europe  has  been  the  foundation  of  commerce;  her 
philosophic  thought  has  been  the  basis  of  all  Western 
religion,  and  the  charm  and  the  spell  of  her  antipodal 
customs  have  been  the  wonder  of  every  Occidental  student 
or  traveler. 

In  spite  of  these  facts,  it  is  notable  that  the  fusion  of 
races,  Asiatic  and  European,  has  never  occurred ;  the  great 
continent  of  Asia  has  never  vitally  associated  its  creeds 
and  customs  with  those  of  the  West ;  its  currents  of  thought, 

307 


808       FOREIGN  TRADE  MARKETS  AND  METHODS 

like  its  streams  of  blood,  liave  not  flowed  together  to  any- 
considerable  extent  in  a  common  consanguinity  with  those 
of  the  Occident,  and  many  of  the  most  profound  students 
of  the  Orient  believe,  that  in  the  deepest  sense,  there  never 
will  exist  absolute  comity  between  the  Asiatic  and  the 
European  or  the  American.  Meredith  Townsend  in  present- 
ing conclusions  derived  from  a  long  life  devoted  to  the 
study  of  relationships  between  Asia  and  Europe  says : 

Asia,  though  it  yields  from  time  to  time  to  the  sudden  impact 
from  Europe  as  water  yields  to  a  ship,  always  flows  back  after 
a  ripple  more  or  less  drawn  out,  without  having  been  apparently 
affected. 

As  one  travels  from  country  to  country  among  those 
people  who  profess  as  religions  thd  creed  of  Islam,  of 
Buddha,  Brahma,  Confucius,  Zoroaster  or  Shinto,  realizing 
meanwhile  the  seemingly  inexhaustible  force  of  these  faiths 
to  grip  and  control  Orientals,  he  also  realizes  how  little 
these  vast  religions  appeal  to  the  "Western  mind,  and  how 
they  seem  to  be  at  home  in  the  tropical  rather  than  in  the 
temperate  zones. 

Let  the  foreigner  come  into  contact  with  the  Eastern 
mind  in  matters  of  trade,  let  him  try  to  match  his  intuitive 
processes  in  diplomacy  or  politics  with  those  of  the  sons 
of  the  Orient,  and  he  very  soon  becomes  conscious  of  cer- 
tain inherent  and  incurable  differences,  inevitably  separat- 
ing him  mentally  from  his  Eastern  neighbor.  During  my 
first  tour  in  the  Orient  twelve  years  ago,  I  met  Occidentals 
who  seemed  to  be  well-nigh  certain  that  they  had  reached 
the  solution  of  certain  racial  and  international  problems 
vexing  the  best  minds  of  "Western  aliens  in  Oriental  lands. 

During  a  more  recent  tour  through  Asia,  I  met  again 
some  of  these  same  persons  who  tell  me  that  their  former 
certainty  has  been  dissipated  and  destroyed  with  further 
years  of  contact  with  Asiatics.  As  one  of  these  persons 
suggested,  a  Westerner  can  only  be  sure  of  the  conclusions 
of  to-day;  to-morrow  is  likely  to  bring  him  a  new  set  of 


CAN  TRADE  WESTERNIZE  ASIA?  309 

strange  and  contradictory  experiences  throwing  all  of  yes- 
terday's conclusions  out  of  balance. 

It  is  not  merely  a  kindergarten  fancy  to  state  that 
Oriental  populations,  from  the  point  of  view  of  the  Oc- 
cidental at  least,  are  walking  on  their  heads.  In  almost 
everything,  Asiatics  are  our  opposites.  Whatever  you  say 
about  anything  Eastern,  remember  that  from  some  other 
angle  of  vision  the  contrary  could  be  truthfully  stated. 

A  former  British  Ambassador  to  Constantinople  wrote: 

"When  you  wish  to  know  what  a  Turkish  ofiQcial  is  likely  to 
do,  first  consider  what  it  would  be  to  his  interest  to  do,  next 
what  any  other  man  would  do  under  similar  circumstances,  and 
thirdly,  what  every  one  expects  him  to  do.  WTien  you  have 
ascertained  these,  you  are  so  far  advanced  in  your  road  that  you 
may  be  perfectly  certain  that  he  will  not  adopt  any  of  these 
courses. 

One  soon  discovers  that  his  Asiatic  impressions  depend 
largely  upon  the  people  whom  he  meets.  I  made  one  trip 
around  the  world  in  which  I  met  many  Protestant  and 
Catholic  missionaries,  European  and  American,  and  talked 
and  lived  with  European  officials  and  Western  men  of 
business.  As  my  conclusions,  drawn  from  this  experience, 
coincided  in  general  with  many  books  which  I  had  read 
upon  travel  and  official  history  written  by  Europeans  and 
the  treatises  and  reports  of  missionaries,  I  somewhat 
naturally  decided  that  my  point  of  view  was  in  general  a 
correct  one,  relative  to  the  character  and  progress  of 
Asiatic  peoples. 

As  a  balance  to  these  impressions  on  another  Eastern 
trip  I  traveled  and  lived  almost  exclusively  with  the  native 
peoples  of  North  Africa,  Egypt  (and  Egypt  is  peculiarly 
Oriental),  India,  Burma,  the  Malay  States,  China,  Japan, 
and  had  also  some  association  with  the  inhabitants  of  the 
Philippines  and  the  islands  of  the  southern  seas.  To  my 
surprise  and  often  to  my  puzzled  bewilderment,  I  found 
myself  inevitably  drawn  to  conclusions  quite  different  from 
those  I  had  previously  formed. 


310        FOREIGN  TRADE  MARKETS  AND  METHODS 

While  I  have  never  met  with  more  lavish  hospitality  or 
more  intelligent  penetration  or  more  decided  social, 
religious  and  political  convictions  than  those  I  encountered 
among  these  Asiatic  folk,  I  have  been  repeatedly  and  con- 
stantly aware  of  something  radically  distinct,  something 
intangibly  and  irremediably  different  from  that  which  my 
Western  birth,  education  and  environment  have  given  me. 
I  have  felt  that,  even  if  I  had  accepted  the  creed  of  the 
Moslem  or  the  Hindu  or  the  Confucianist,  this  barrier 
would  not  have  been  removed. 

The  sense  has  not  always  been  present,  to  be  sure.  At 
times  one  seems  to  forget  entirely  his  geographical  and 
racial  partitions  in  converse  with  men  of  light  and  leading 
who  are  as  fully  acquainted  with  the  history  and  movements 
of  nations,  as  those  of  the  highly  educated  classes  of  the 
West.  But  when  one  follows  these  same  congenial  and 
modern  Asiatics  into  their  homes  or  to  their  places  of 
worship,  or  comes  upon  them  suddenly  when  they  are  off 
guard,  surrounded  by  their  own  people  or  friends,  this 
mysterious  lack  of  comity  again  arises. 

One  finds  himself  asking:  Can  Asia  ever  become  really 
Westernized?  What  is  to  be  the  effect  of  our  new  trade 
contacts  ?  Is  there  not  some  inherent  dissimilarity  between 
the  West  and  the  East  which  forever  forbids  the  one  perma- 
nently to  mix  with  or  to  conquer  the  other?  Can  the 
training  in  commerce  and  in  the  arts  and  sciences  of  the 
West  cure  these  prejudices  of  color  and  creed,  these  natural 
and  temperamental  incongruities ;  or  has  Providence  rooted 
deeply  and  inextricably  distinct  laws  of  the  mind  and  the 
spirit  in  these  truly  distinct  continents,  so  deeply,  so  inex- 
tricably that  all  human  effort  will  appeal  in  vain  for  their 
real  union? 

National  and  racial  contrasts  are  among  the  most  real 
things  one  feels  as  he  delves  into  the  life  and  history  of  the 
Asiatics. 

The  artistic  ability  of  the  Oriental  is  unquestioned. 
Asiatics  have  built  the  Taj.  and  the  Alhambra ;  they  have 
constructed  the  marvelous  temples  of  Buddhism  j  they  have 


CAN  TRADE  WESTERNIZE  ASIA?  311 

built  the  graceful  towers  and  the  temples  and  mosques  of 
Cairo  and  Benares;  they  are  responsible  for  the  towers  of 
Nanking  and  the  palaces  of  the  Shoguns.  Chinese  porce- 
lain is  the  best  of  its  kind  in  the  world,  and  the  literary 
and  the  artistic  ability  of  the  Tagores  of  India  can  be 
duplicated  in  many  a  circle  of  India  and  Japan.  One  will 
not  find  in  Western  lands  the  equal  of  such  work  as  the 
Damascus  blade,  the  gold  chains  of  Trichinopoli,  or  the 
black  wood  carving  of  the  Middle  Kingdom. 

Yet  in  the  conquest  of  nature,  Asia  is  behind  Europe 
and  Western  nations.  Living  for  centuries  above  great 
mines  of  iron,  coal,  tin  and  platinum,  she  has  been  content 
to  shiver  about  her  tiny  braziers  or  her  fires  of  cowdung, 
to  plow  with  crooked  sticks,  to  use  gourds  for  carrying 
receptacles  and  to  make  her  homes  in  temporary  dwellings 
of  mud  and  straw.  In  the  science  of  medicine,  in  machin- 
ery, in  scientific  discovery  and  in  the  conquering  of  natural 
resources  generally,  Asia  for  generations  has  been  tried  in 
the  balance  and  has  been  found  wanting. 

From  the  point  of  view  of  morals  also,  the  Asiatic  is 
different  from  the  European  and,  from  the  latter 's  point 
of  view,  is  unadvanced.  He  is  at  times  a  creature  of  su- 
perstition. The  "evil  eye"  of  Egypt  has  a  thousand 
counterparts  in  a  thousand  Asiatic  communities.  The 
Oriental  is  not  moral  in  the  sense  known  in  the  West.  He 
often  practices  falsehood,  and  often  sees  no  evil  in  so  do- 
ing, save  as  falsehood  is  objectless  or  unsuccessful. 

He  is  more  truly  a  hero  worshiper  than  the  Westerner. 
Confucius,  who  did  not  claim  to  be  a  prophet,  has  molded 
the  thought  of  vaster  populations  than  any  other,  save  that 
of  the  Oriental,  Jesus  of  Nazareth,  while  the  name  of 
Mahomet  is  a  compelling  idea  to  two  hundred  and  twenty 
millions  of  the  earth's  inhabitants. 

Asia,  moreover,  differs  from  Europe  in  being  a  land  of 
contented  acquiescence  rather  than  one  of  aggressive 
acquisition.  Despite  hunger  and  famine  and  pestilence  and 
sword,  Asia  has  pursued  her  way  unchangingly  until 
the  present,  indifferent  alike  to  misfortune,  wars  and  death. 


312       FOREIGN  TRADE  MARKETS  AND  METHODS 

Save  in  astronomy,  the  East  has  made  small  contribution 
to  science.  She  has  produced  no  great  historians,  and  until 
recently  she  has  had  few  great  travelers  and  investigators, 
and  has  been  accustomed  to  give  small  credence  to  the 
accounts  of  tourists  and  traders  relative  to  conditions  in 
foreign  lands. 

But  as  the  originators  of  philosophy  regarding  relations 
between  the  seen  and  the  unseen  world,  the  whole  earth 
has  gone  to  school  to  Asia.  Whence?  Whither?  Why? 
These  are  the  questions  which  have  been  the  subject  matter 
of  Asia 's  deepest  thought.  She  has  rested  her  great  religions 
like  Hinduism  and  Buddhism  upon  the  deep  philosophies 
of  the  mind  and  spirit. 

In  the  doctrine  of  reincarnation,  Asiatic  religion  has 
attacked  and  solved  for  itself,  at  least,  the  most  vexing 
problem  of  the  world,  the  problem  of  the  origin  and  reason 
of  evil,  and  the  apparent  uneven  justice  in  the  world 
presided  over  by  a  just  God,  the  problem  that  no  Western 
race  has  satisfactorily  settled  for  the  majority  of  its 
adherents. 

To  the  Westerner,  this  doctrine  is  faulty  in  many  of  its 
phases;  it  is  difficult  to  secure  adequate  evidence  and  the 
man  of  the  West  demands  objective  as  well  as  subject- 
ive evidence  for  his  truth.  Nevertheless,  the  faith  has 
been  the  means  of  saving  millions  of  Asiatics  from  irre- 
ligion  and  the  atheism  which  at  various  times  has  spread 
over  Europe.  Who  can,  with  honesty,  utterly  deride  a 
creed  that  acts  as  a  bridge  from  doubt  to  faith  for  mil- 
lions, even  though  the  creed  may  seem  at  times  a  tissue 
of  superstitions  and  far  from  perfect  in  its  working. 

The  Moslem,  while  he  does  not  accept  the  theory  of 
incarnation,  finds  for  himself  an  adequate  explanation  of 
the  evil  of  the  universe  in  the  idea  that  "Allah  wills." 
Fatalistic  it  may  seem,  but  it  has  held  the  faithful  with  a 
mighty  grip,  defying  all  attempts  at  conversion,  and  has 
made  Islam  the  ** missionary's  despair." 

The  weakness  of  the  Asiatic's  religion  lies  in  his  lack  of 
emphasis  upon  ethics  and  social  responsibility.    He  cares 


CAN  TRADE  WESTERNIZE  ASIA?  313 

little,  in  fact,  for  the  great  thought  of  the  brotherhood  of 
man.  He  is  strictly  a  religious  individualist.  Outside  of 
his  family  or  clan  or  caste  into  which  he  is  religiously  bound, 
he  has  little  appreciation  of  an  obligation  to  his  neighbor. 
It  is  the  absence  of  good  Samaritanism  that  has  caused  Asia 
untold  conflicts,  murders,  wars  and  turmoil.  Although  we 
may  say  that  the  "West  has  not  lived  up  to  the  second  great 
commandment,  we  must  also  add  that  the  West  believes 
that  it  ought  to  live  up  to  it,  while  the  East  disregards  it 
or  treats  it  with  contempt. 

The  fifth  commandment,  however,  is  obeyed  in  Asia  as 
in  no  other  part  of  the  earth,  the  devotion  of  son  to  father 
being  a  kind  of  unwritten  law  instinctive  in  the  Oriental's 
thought  and  heredity.  Polygamy,  on  the  other  hand,  is 
not  considered  adultery,  the  Moslem  sanctioning  it  and 
the  Hindu  allowing  it  in  cases  when  the  first  wife  is  child- 
less. Asiatics  are  also  free,  or  have  been  in  the  past  quite 
free,  from  that  gnawing  and  baneful  covetousness  of  the 
"West  through  their  beliefs  in  the  adjustments  of  society  by 
a  wise  Providence. 

Although  the  Asiatic  is  accustomed  to  absolute  authority 
and  bows  to  the  will  of  a  sovereign,  as  to  a  divine  mandate, 
who  may  with  impunity  inflict  death  upon  him,  he  has 
resisted  for  centuries  the  encroachments  of  the  "West.  "With- 
out being  renowned  as  a  marshaler  of  armies,  Asia  drove 
Rome  from  her  Persian  borders,  and  Alexander  with  his 
matchless  political  insight,  coveting  the  disintegration  of 
the  Asiatic  peoples,  only  succeeded  in  founding  a  few 
Greek  dynasties  within  Asiatic  limits,  and  one  will  search 
in  vain  in  Asia  to-day  for  any  considerable  Greek  influence. 

England  has  made  deeper  impress  in  Oriental  Egypt 
and  in  India,  the  flower  of  the  British  Empire,  than  has  any 
other  European  nation.  But  if  England  should  leave  the 
East  to-morrow,  her  impression  of  many  scores  of  colonizing 
years  would  hardly  be  deeper  than  the  externals  of  modern 
civilization.  In  that  part  of  Oriental  thought  and  life, 
which  to  the  Easterner  is  really  the  life — religion — England 
has  said,  "Hands  off!"  and  in  this  real  life  of  Asia  she 


314       FOREIGN  TRADE  MARKETS  AND  METHODS 

has  attempted  and  has  accomplished  little  or  no  change. 
Asia  is  not  an  aggressive  conqueror,  but  by  her  power  of 
passive  resistance,  springing  out  of  her  conviction  of  the 
difference  of  permanent  ideals  between  herself  and  the 
West,  she  has  proved  a  tremendous  ability  to  reject  her 
conquerors  and  to  survive  them.  Her  spirit  has  been  not 
unlike  that  of  Socrates  who  could  drink  the  hemlock  and 
murmur  triumphantly:  "You  can  have  my  soul  if  you 
can  catch  me."  The  West  has  never  captured  the  soul  of 
the  East,  and  one  doubts  that  she  ever  will. 

From  700  to  1757,  a  thousand  years  and  more,  Asia  was 
supremely  Asiatic  save  for  a  small  raid  upon  her  borders 
by  the  Crusaders.  Although  it  would  seem  that  Great 
Britain  has  formed  new  precedents  of  control  in  Asia,  a 
close  scrutiny  of  the  facts  reveal  with  what  difficulty  this 
control  is  being  preserved.  A  few  years  before  the  open- 
ing of  the  World  War,  Lord  Kitchener  was  rushed  to 
Egypt  to  prevent  imminent  disaffection  and  disaster,  and 
it  is  generally  believed  that  only  the  presence  of  the  late 
modern  Pharaoh  with  his  soldier's  hand  of  iron  preserved 
anything  like  quiet  in  the  land  of  the  Nile.  The  frequent 
recurrence  of  bomb  throwing  and  assassinations  in  India 
give  an  inkling  of  what  is  seething  below  the  surface  where 
people  are  being  ruled  by  an  alien  race.  I  was  repeatedly 
told  by  English  officials  that  a  more  extensive  and  careful 
secret  service  was  now  in  vogue  than  ever  before  had  been 
known  in  this  land. 

"You  never  know  what  is  going  to  happen  here,"  said 
a  keen  deputy  commissioner  in  the  Central  Provinces,  a 
man  who  mixed  with  thousands  of  natives  every  month. 

The  Sepoy  Rebellion  of  1857  is  always  a  shadow  in  the 
back  of  Tommy  Atkins'  mind,  and  its  renewal  is  by  no 
means  a  fanciful  possibility.  ' '  All  is  quiet, ' '  says  the  home 
Government,  but  let  a  disinterested  investigator  travel  and 
live  in  the  native  states  of  India,  which  compose  such  an 
influential  part  of  India,  that  in  the  Sepoy  Rebellion  the 
loyalty  of  one  State  alone,  Hyderabad,  saved  India  for 
Britain,  and  what  does  he  find?     To  be  sure,  outwardly 


CAN  TRADE  WESTERNIZE  ASIA?  315 

all  is  calm  and  you  will  frequently  find  all  kinds  of  meet- 
ings of  memorial  and  appreciation  to  His  ExceJleucy,  tlio 
Viceroy,  and  in  public  a  marked  deference  on  the  part  of 
the  Indian  towards  his  British  Raj.  But  when  you  meet 
the  native  in  the  privacy  of  his  owii  home,  if  you  are 
fortunate  enough  to  induce  him  to  break  through  the  barriei 
of  language  and  nationality,  you  will  find,  almost  invari- 
ably, something  more  akin  to  hate  than  to  love  for  his 
British  overlords.    Said  a  vexed  native  Prince : 

Do  you  know,  I  can  hardly  buy  a  pen  or  a  sword  for  myself 
without  asking  the  British  Resident  for  permission. 

The  attitude  of  mind  is  not  unlike  that  of  Tewfik  Pasha 
who,  in  the  early  days  of  the  English  occupation  of  Egypt, 
while  watching  a  review  of  British  troops  said  to  one  of 
his  ministers: 

Do  you  suppose  I  like  this?  I  tell  you  I  never  see  an  English 
sentinel  in  my  streets  without  longing  to  jump  out  of  my  carriage 
and  strangle  him  with  my  own  hands. 

England  has  indeed  been  engaged  in  a  great  undertak- 
ing, and  the  result  is  becoming  evident  in  a  new  material 
India  and  Egypt.  But  a  people  is  not  changed  at  heart 
by  means  of  mechanical  devices,  whether  they  are  railroads 
or  irrigation,  new  markets,  or  "Western  buildings.  As  a 
nation  thinketh  in  its  heart,  so  is  that  nation.  As  Matthew 
Arnold  accurately  has  said: 

By  the  soul  only 

The  nation  shall  be  great   and  fi'ee. 

For  the  last  few  years  we  have  been  optimistically  stat- 
ing our  beliefs  in  a  new  China.  Behold  a  new  Republic 
in  an  old  Empire !  Sweeping  changes  in  every  department 
of  her  life,  young  men  in  European  bowlers  and  frock 
coats,  Chinese  women  with  unbound  feet  becoming  inter- 
ested in  Western  dressmaking  and  society,  a  new  constitu- 


316       FOREIGN  TRADE  MARKETS  AND  METHODS 

tion  and  a  new  set  of  politicians,  closely  resembling  those 
made  in  America !  In  place  of  the  old  Literati  examination 
stalls,  modern  school  buildings,  like  those  found  in  Europe 
and  the  United  States  and  a  new  President  of  the  Republic 
himself,  although  a  Confucianist,  appointing  a  day  of 
prayer  for  China,  asking  especially  the  supplications  of 
Christians  for  the  New  Republic.  I  was  in  China  shortly 
after  Doctor  Sun  stated  that  "the  new  Republic  is  the 
formal  declaration  of  the  will  of  the  Chinese  people. ' '  He 
told  me  of  plans  for  trunk  line  railroads,  bringing  together 
the  vast  areas  of  this  old  awakened  land.  The  dragon  throne 
seemed  rocking  to  its  fall,  the  collapse  of  Manchu  and 
Literati,  the  dissolving  of  Confucianism  and  the  customs 
of  centuries  all  passing  as  in  the  twinkling  of  an  eye. 

Yet  those  who  knew  China  and  who  were  acquainted 
with  the  treachery,  the  rapine,  the  piracy  on  the  Kwang 
Tung  coast,  the  assassinations  and  ineffectual  delays  of  the 
new  Parliament,  those  who  came  in  daily  contact  with  these 
half-Occidentalized  young  politicians,  realized  the  artifi- 
ciality of  such  conquests  of  the  East  by  the  "West.  They 
knew  that  China  had  been  accustomed  to  upheavals^  politi- 
cal as  well  as  social,  and  that  China  regarded  not  the 
change  of  clothes  nor  the  vicissitudes  of  rulers,  as  she  went 
unheedingly  throughout  her  vast  secluded  provinces,  en- 
grossed with  the  all-important  and  eternal  question  of 
daily  rice.  He  who  knows  China  appreciates  that  a  nation, 
which  has  seen,  unmoved,  a  Taiping  Rebellion,  devastating 
nine  provinces  and  destroying  forty  millions  of  lives,  a 
country  which  underwent  four  famines  in  the  first  half 
of  the  nineteenth  century,  costing  the  lives  of  forty-five 
millions  of  Chinese,  is  not  easily  and  rapidly  to  be  stirred 
out  of  its  age-long  placidity  of  habit  and  temper. 

One  keen  discerner  of  Chinese  life  has  said  that: 

The  problem  of  China  is  one  of  economies,  incurable  either 
by  religious  teaching  or  by  legislative  formula. 

In  the  shadow  of  all  this  uprising  and  seeming  renaissance, 
the  groundwork   of  rural,  ancestor-worshiping  Chinese  mil- 


CAN  TRADE  WESTERNIZE  ASIA?  317 

lions  is  inherently  the  same,  as  it  would  seem,  yesterday, 
to-day  and  forever. 

Here,  as  in  India  and  Egypt,  one  finds  increasingly 
encouraging  signs  of  new  and  better  conditions  wrought 
by  trade  contacts  in  the  Western  world,  by  modern  proc- 
esses of  thought  and  scientific  and  social  machinery.  But 
new  constitutions  and  new  buildings  crumble  beneath  the 
steady  and  regular  motions  of  centuries  of  habits  and  hered- 
itary thought.  China  may  take  on  the  glad  garments  of 
the  "West;  she  may  assume  the  language  of  the  present, 
but  her  thought  and  her  motives  rise  out  of  a  vast  repressive 
past.     The  real  change  is  amazingly  slow. 

One  then  is  driven  repeatedly  to  the  query,  what  does  it 
mean  to  westernize  Asia  and  who  is  capable  of  so  gigantic 
a  task? 

Is  America  with  our  halting  attempts  at  representative 
government,  with  our  pipings  of  peace  advocates,  drowned 
by  the  roar  of  guns  and  armed  conflicts  with  our  neighbors  ? 
Torn  by  civil  strife  between  employers  and  employed,  our 
municipal  governments  distracted  between  the  crimes  of 
officials  and  the  threats  of  anarchism,  can  we  consistently 
elevate  the  Republican  idea  in  behalf  of  the  Oriental? 
While  over  all  our  life  in  the  West  is  the  trail  of  luxury, 
of  pleasure-seeking  and  utilitarian  self-hood,  shall  we  go 
to  China  or  to  India  and  have  compelling  power  with  a 
new  social  gospel? 

Shall  Europe  so  often  at  war  with  her  brother  nations, 
with  her  continental  agnosticism  and  socialism,  or  England 
with  her  civic  and  industrial  strifes  and  conflicts  with  her 
own  divisions,  teach  the  Asiatic  peace  and  the  secrets  of 
higher  powers,  individual  or  national? 

We  cannot  but  ask  at  times  as  to  how  effective  our 
religious  message  may  be  to  Asia,  the  mother  of  our  Western 
spiritual  creeds.  When  the  keen  Oriental  tells  us  that  our 
religion  has  lost  the  spontaneous  loyalty  and  glad  devotion 
of  our  thinking  classes,  that  our  forms  and  rituals  of 
professional  religion  are  being  upheld  principally  by 
women,  that  we  are  divided  into  a  hundred  camps  and 


318       FOREIGN  TRADE  MARKETS  AND  METHODS 

orders  of  faith,  while  outside  the  church,  men  are  crowd- 
ing our  new  civilization  with  multifold  movements  for 
uplift,  social,  charitable,  and  philanthropic,  with  all  their 
evident  duplication  and  often  with  the  lack  of  a  deep 
religious  purpose — when  the  Oriental  points  out  in  answer 
to  our  derision  of  his  Ganges  worship,  his  lepers  and  his 
poverty,  that  all  these  efforts  at  reform  in  America  are 
the  symptoms  of  distress  and  moral  and  physical  failure 
that  ought  to  have  been  prevented  by  the  essential  religion 
we  claim  to  represent,  what  answer  shall  we  give  ? 

Do  we  expect  the  keen-eyed  scrutiny  of  the  Oriental  to 
overlook  the  real  results  of  a  Christian  civilization  as  these 
results  pass  through  his  domains  and  are  hurled  before 
his  eyes  in  the  persons  of  unscrupulous  foreign  traders 
who  laugh  at  his  sacred  things  ?  A  member  of  a  high  gentry 
family  in  China  spent  an  afternoon  in  telling  me  of  the 
bacchanalian  orgies  of  Europeans  and  Americans  in  the 
port  cities,  of  the  acts  of  European  business  men  under  the 
guise  of  trade,  the  trivial  example  of  tourists,  the  bicker- 
ings and  divisions  of  rival  Western  faiths  and  the  re- 
stricted laws  of  immigration,  which  excluded  his  people 
from  America,  through  what  he  called  the  economic  greed 
of  the  United  States. 

Let  us  not  blame  our  missionaries,  if  we,  by  our  works, 
make  it  too  hard  for  them  to  influence  the  educated 
Easterner  to  accept  our  faith.  Let  us  not  wonder  that 
Asia  hesitates  to  displace  the  gods  whose  protection  she 
knows,  for  those  she  knows  not  of,  especially  when  those 
who  worship  them  seem  to  deal  in  terms  of  gold  and 
*' things"  rather  than  in  the  "fruits  of  the  spirit." 

When  we  appreciate  that  no  American  can  hold  land  in 
Japan,  and  that  foreign  missionaries  have  been  obliged  to 
retire  into  honorary  and  advisory  relation  to  the  new  self- 
guiding  and  new  self-supporting  churches,  we  are  reminded 
of  the  fact  that  the  most  advanced  portions  of  the  Orient 
have  not  learned  to  trust  the  Occident.  Indeed  the  distrust 
of  anything  in  method  or  practice  emanating  from  America 
is  so  pronounced  and  general  in  Japan  that  speakers  and 


CAN  TRADE  WESTERNIZE  ASIA?  319 

writers  on  education,  politics  and  religion  have  been  fre- 
quently warned  to  eliminate  illustrations  referring  to 
Western  and  American  ways  of  doing  things,  if  they  would 
have  influence  with  their  hearers.  There  was  a  time  when 
it  was  said  in  England  that  no  Britisher  reads  an  American 
book;  it  is  now  a  time  in  the  Sunrise  Kingdom  when  one 
might  say  that  no  one  follows  an  American  method,  at 
least  not  without  rigid,  native  modifications. 

And  yet  the  Orient,  in  self-preservation  must  be  modern- 
ized, even  westernized  to  a  degree  at  least.  For  her,  the 
future  must  bring  the  open,  not  the  closed,  door,  to  the 
Occident  in  trade,  in  education,  in  social  and  religious 
influence.  The  next  quarter  of  a  century  promises  changes 
and  advances,  economically,  scientifically  and  politically, 
that  may  again  change  the  balance  of  commercial  and 
perhaps  territorial  conditions.  Modernity  has  already 
passed  through  the  portals  of  the  East  into  the  great 
Oriental  cities.  Although  this  present-day  leaven  of 
westernization  has  as  yet  worked  but  a  small  way  into 
Asia — as  the  present  unrest  of  Japan,  the  most  advanced 
Eastern  government  is  demonstrating — it  will  most  surely 
continue  to  penetrate  these  vast  continents  until  even  the 
remotest  fellaheen  and  Thibetan  lama  shall  feel  its  irresist- 
ible impulse — and  the  Orient  shall  be  changed,  not  suddenly, 
not  in  a  generation,  not  by  something  revolutionary,  nor 
finally  by  the  aggressive  forces  of  the  westerner,  but  rather 
by  the  rising  up  of  the  awakened  Orient  herself  to  com- 
prehend, to  choose  or  to  reject,  as  Japan,  China  and  India 
have  already  begun  to  do. 

When  India  accepts  Christianity  (said  an  astute  American 
educator),  as  I  believe  she  will  accept  it  one  day,  it  will  be  a 
Christianity  with  Hinduism,  not  Judaism,  for  her  Old  Testament. 

In  other  words,  in  faith,  as  in  trade  and  in  everything 
else,  permanent  Oriental  modernization  will  be  funda- 
mentally East,  not  West.  The  renewal  of  the  Orient,  for 
her  own  good  and  for  the  health  of  the  nations,  will  grow 


320       FOREIGN  TRADE  MARKETS  AND  METHODS 

out  of  the  awakened,  active  brain  and  heart  and  hand  of 
her  own  sons  and  daughters,  and  its  roots  will  cling  about 
the  rock  foundation  of  her  own  traditions,  her  own  time- 
lessness,  her  own  temperament,  and  her  own  religion.  The 
Occident  can  help,  though  she  can  never  truly  westernize 
the  Orient — but  the  Orient  can  and  will  westernize  her- 
self. 

Let  the  trader,  therefore,  going  to  the  East  to  get  business 
acquaint  himself  in  advance  with  the  inherent  character- 
istics and  age-long  traditions  dominating  tlie  Oriental. 
Lasting  commerce  with  a  foreign  nation  is  based  first  of 
all  upon  clear  comprehension  of  the  nature  of  the  people. 
Trade  methods  and  merchandising  arrangements  can  be 
adjusted  properly  only  when  this  first  step  is  taken.  The 
exporter  or  manufacturer  who  has  learned  that  he  cannot 
change  Asia,  her  desires,  her  racial  requirements  or  her 
religion,  at  least  not  in  generations,  has  taken  the  first  step 
toward  the  trade  modifications  positively  essential  in  west- 
ernizing the  Orient. 


CHAPTER  XXI 
OUR  TRADE  IN  THE  NEAR  EAST 

There  are  good  and  sufficient  reasons  why  traders  and 
manufacturers  of  the  United  States  should  consider  the 
possibilities  and  present  opportunities  for  commerce  in  that 
extensive  territory  bordering  upon  the  eastern  Mediter- 
ranean, Black,  Aegean  and  Red  seas. 

Out  of  this  historic  section  of  the  earth,  containing  a 
population  estimated  at  upwards  of  25,000,000,  came  the 
Phoenician  and  Tyrian  shippers  and  traders,  who  at  one 
time  dominated  the  foreign  commerce  of  the  world,  while 
the  Golden  Horn  has  been  a  seat  of  trade  for  2600  years. 

From  this  region  also  have  sprung  the  religions  that 
have  spread  over  the  European  and  western  continents. 

From  the  Near  East,  moreover,  we  have  received  some 
of  the  greatest  streams  of  immigration — Greeks,  Armenians, 
Syrians,  and  Jews — who  have  come  to  the  United  States 
to  found  homes  and  acquire  citizenship  and  prosperity, 
helping  to  link  our  country  with  the  vast  expanse  which, 
excluding  Arabia,  includes  upwards  of  450,000  square  miles 
of  territorial  area. 

Into  this  borderland  of  the  great  Near  Eastern  sea  we 
have  sent  our  missionaries  for  more  than  a  century  and  for 
all  these  years  the  name,  America,  has  been  known  to  the 
populations  of  the  Near  East  as  synonymous  with  modem 
education,  with  activities  of  charitable  benevolence  in  times 
of  distress,  and  with  a  disinterestedness  as  far  as  territorial 
aggression  is  concerned,  that  has  made  America  less  often 
suspected  and  more  truly  trusted  than  members  of  any 
other  nationality. 

321 


322       FOREIGN  TRADE  MARIvETS  AND  METHODS 

Our  hospitals  are  to  be  found  in  every  city  in  Turkey 
and  our  preachers  and  medical  doctors  in  almost  every 
village.  Other  nations  have  invested  in  these  Near  Eastern 
lands  for  gain,  while  we  have  poured  into  this  region 
$20,000,000  in  founding  schools  and  colleges,  $40,000,000 
in  feeding  the  hungry,  and  $50,000,000  in  affording  mission- 
ary teaching,  free  medicine,  and  extending  the  borders  of 
western  civilized  science  and  instruction. 

All  of  this  activity  and  giving  have  helped  lay  the  founda- 
tions for  a  stable,  modem  commercial  life,  now  about  to 
give  ample  evidence  of  the  value  of  these  forerunners  of 
national  prosperity.  Any  European  nation  would  eagerly 
grasp  at  such  advantages  of  favor  to  establish  commercial 
ties.  But  while  our  trade  in  the  Near  East  may  be  said  to 
have  the  possibility  of  foundation  upon  a  broad  basis 
of  philanthropy  and  confidence,  we  have  thus  far  almost 
neglected  this  commercial  open  door.  It  is  high  time  that 
we  consider  the  Near  East  as  a  trading  center  of  vast 
importance  lying  along  one  of  the  greatest  and  oldest  com- 
mercial trade  routes  of  the  world. 

It  is  largely  because  of  such  interest  as  the  United  States 
has  shown  in  the  Levant  that  the  populations  there,  espe- 
cially the  Turkish  section,  subsequent  to  the  war,  hailed 
with  eagerness  the  idea  of  a  mandate  making  possible 
American  supervision.  While  this  matter  is  one  of  doubtful 
policy  in  the  minds  of  many  Americans,  it  has  given  ample 
reason  for  belief  in  the  moral  and  political  favor  with  which 
the  Near  East  looks  upon  the  United  States.  This  is  a  factor 
not  to  be  overlooked  as  an  element  of  great  value  in  any 
move  we  may  make  in  the  near  future  toward  trade  and 
shipping  relationships. 

While  we  have  with  justice  given  our  attention  and  trade 
to  Latin  America,  since  these  populations  are  near  and 
belong  to  our  own  hemisphere,  to  China  and  the  Far  East 
where  our  Philippine  interests  have  lured  our  commerce, 
It  must  be  kept  in  mind  that  there  exists  no  portion  of 
the  earth  of  equal  extent  to  which  American  exporters  thus 
far  have  given  so  slight  attention  as  to  the  Levant. 


OUR  TRADE  IN  THE  NEAR  EAST  323 

That  there  is  ample  reason  lying  in  the  rich,  almost 
untouched  resources  of  this  section  for  our  trade  interest, 
can  be  easily  demonstrated.  For  proof  of  this,  reference 
may  be  made  simply  to  the  coal  fields  along  the  Black  Sea ; 
the  oil  fields  of  the  Persian  Gulf ;  the  extensive  grain  fields, 
where  the  yield  as  it  is  conservatively  estimated  could  be 
raised  in  a  decade  to  200,000,000  bushels ;  the  great  copper 
areas  upon  which  France  is  centering  her  attention;  the 
cotton  possibilities  in  Mesopotamia ;  the  wool  of  Asia  Minor; 
the  natural  ?.ilk  areas;  and  the  region  furnishing  the 
world 's  supply  of  opium,  licorice  and  the  fine  tobaccos. 

To  quote  from  a  report  by  Lewis  Heck,  of  the  American 
consular  service,  regarding  our  import  and  export  trade 
with  the  Near  East: 

Before  the  war  the  United  States  bought  from  the  Near  East 
some  fifty  million  dollars'  worth  of  goods,  principally  raw 
materials  such  as  cotton  from  Egypt;  tobacco,  wool,  mohair, 
skins,  opium,  rose  oil,  licorice  root,  di*ied  fruits  and  uuts,  etc. 
from  Turkey;  skins  and  coffee  from  Aden;  dried  fruits,  cheese, 
olive  oil  and  tobacco  from  Greece;  copper  and  plum  jam  from 
Serbia;  rose  oil  and  tobacco  from  Bulgaria;  reclaimed  rubber 
and  wool  from  Odessa;  licorice  root,  wool,  manganese  and  hard- 
woods from  Batoum.  The  manufactured  goods  consisted  of 
carpets  and  rugs,  laces,  and  curios,  etc.,  and  represented  only  a 
small  proportion  of  the  total.  In  general,  the  region  is  agricul- 
tural and  pastoral  rather  than  industrial,  and  there  is  but  rela- 
tively slight  industrial  development  in  an}''  of  these  countries, 
so  that  for  many  years  to  come  they  will  have  to  import  manu- 
factured and  finished  merchandise  and  will  not  have  much  in 
these  lines  to  oft'er  for  sale  in  other  countries.  Their  climates 
and  soils  enable  them  to  produce  better  than  elsewhere  certain 
staple  articles  for  which  there  will  always  be  a  demand  in  western 
Eui'ope  and  the  United  States,  and  they  will  have  theh'  natural 
products  to  offer  in  exchange  for  their  importations  of  finished 
commodities,  until  such  futiu'e  time  as  their  own  domestic  indus- 
tries shall  come  to  a  greater  degi'ee  of  production  and  variety. 

For  this  reason  the  countries  of  the  Near  East  offer  a  permanent 
field  for  the  sale  of  the  products  of  industry  and  manufacture, 
the  value  of  which  has  always  been  fully  recognized  by  our  main 


324       FOREIGN  TRADE  MARKETS  AND  METHODS 

competitors  in  Europe,  although  we  have  often  overlooked  it 
because  of  its  distance  and  of  relatively  larger  markets  else- 
where. Nevertheless,  a  portion  of  the  world  which  annually 
imported  some  $550,000,000  worth  of  foreign  goods  before  the 
war  is  worthy  of  closer  study  now  that  our  exporters  have  waked 
up  and  are  both  ready  and  eager  to  really  go  after  a  fair  share 
of  this  trade,  instead  of  waiting  till  some  small  share  of  it 
comes  to  them  of  its  own  accord. 

On  the  export  side,  we  sold  to  all  the  Near  East,  including 
Southern  Russia,  goods  to  a  value  of  between  ten  and  twelve 
million  dollars  per  annum  before  the  war.  A  large  proportion 
of  this  total  consisted  of  mineral,  animal  and  vegetable  oils'; 
textiles  played  a  smaller  and  decreasing  part,  as  we  had  to  give 
way  to  more  active  British  and  Italian  competitors.  We  had 
some  small  business  in  leather  and  hides,  shoes,  rubber  overshoes, 
typewriters  and  supplies,  agricultural  machinery,  the  better  grades 
of  tools  and  certain  American  specialties,  but  in  the  principal 
staples  which  form  the  bulk  of  any  real  volume  of  trade  we  had 
almost  no  share,  in  spite  of  the  fact  that  for  the  exports  of 
Turkey  we  were  the  second  best  customer,  next  after  Great  Britain, 
and  also  bought  the  second  largest  share  of  Egypt's  principal 
crop.  The  heavy  trade  balance  against  us  was  paid  for  by 
remittances  from  immigrants  to  their  home  folks;  by  sums 
expended  for  American  schools,  missions,  and  colleges,  etc.;  by 
tourists'  expenditures,  for  many  thousands  of  them  annually 
visited  Egypt,  Palestine  and  Constantinople;  and  by  financial 
adjustments  through  European  countries.  These  remittances  and 
expenses,  of  course,  increased  our  debt  to  the  Near  East,  but  here- 
after we  should  be  able  to  exchange  an  increasingly  larger  volume 
of  our  own  products  for  the  goods  we  buy. 


It  must  be  remembered  that  whatever  trade  we  have  had 
with  this  section  has  been  done  practically  with  little  or 
no  American  shipping  to  this  region,  depending  upon 
foreign  nations  not  only  for  ships  but  banks  and  other 
facilities.  It  was  the  writer 's  privilege  to  pass  through  the 
Suez  Canal  at  the  time  that  our  American  fleet  in  its 
voyage  around  the  world  was  returning  and  lay  in  the  Suez 
Canal.  An  Egyptian  business  man  said  then  that  the 
people  of  the  present  generation  in  the  Near  East  had  never 


OUR  TRADE  IN  THE  NEAR  EAST  325 

seen  before  the  American  flag  floating  from  any  vessel  save 
possibly  from  an  occasional  American  pleasure  yacht  or 
from  a  small  tramp  steamer  too  insignificant  to  make  any 
particular  impression  upon  any  one.  In  fact,  outside  our 
diplomatic  and  consular  service,  there  was  no  organization 
for  trade  in  this  section  until  in  1911  the  American  Cham- 
ber of  Commerce  for  the  Levant  was  formed.  This  body 
now  has  a  membership  of  600  firms  and  individuals  located 
for  the  most  part  in  the  commercial  centers  of  the  Levant. 

While  trade  relations  of  the  United  States  with  Turkey 
and  considerable  of  the  Balkan  peninsula  during  the 
period  of  the  war  were  of  small  importance,  there  was  quite 
a  large  volume  of  dollar  exchange  carried  on  which  helped 
to  accustom  local  merchants  and  local  bankers  in  the  Near 
East  to  the  habit  of  dealing  with  the  United  States,  also 
to  establish  credits  in  this  country  which  have  been  used 
to  purchase  American  goods. 

The  American  Embassy  at  Constantinople  was  connected 
with  a  sale  of  dollar  exchange  to  the  amount  of  more  than 
$10,000,000  to  provide  funds  for  relief  in  charitable  pay- 
ments of  various  sorts.  The  Entente  Governments  furnished 
several  million  dollars  of  this  fund  since  the  American 
diplomatic  and  consular  representatives  looked  after  the 
interests  of  these  Governments  during  the  fighting  period. 
There  were  several  million  dollars  deposited  with  the  State 
Department  to  individual  beneficiaries  and  treasuries  and 
a  considerable  amount  was  left  in  funds  in  relief  organiza- 
tions, such  as  the  Armenian  and  Syrian  Relief  Committee, 
and  the  Joint  Distribution  Committee  of  the  Jewish  Chari- 
table organizations. 

Trade  relations  with  the  United  States  were  kept  up  by 
Egypt  and  Greece  during  the  war  and  both  of  these  coun- 
tries have  prospered  along  different  lines  since  1914,  so 
much  so  that  Greek  currency  has  been  kept  almost  at  par. 
The  Egyptian  situation  although  affected  somewhat  by  poli- 
tical agitations  and  labor  troubles,  is  on  the  whole  promis- 
ing. 

The  following  table  gives  a  general  idea  of  Egyptian 


326       FOREIGN  TRADE  MARKETS  AND  METHODS 

trade,  together  with  imports  from  and  exports  to  the  United 
States : 


Total  Exports 

Total  Imports 

1914 
1915 
1917 
1918 

$120,218,062 
134,963,892 
204,892,454 
226,396,400 

$108,405,784 

94,451,676 

158,876,608 

255,264,976 

Year  ending 
June 

Imports  from  U.  S. 

Exports  to  U.  S. 

1919 
1920 
1921 

$10,293,189 
27,129,699 
29,118,357 

$  23,934,571 

105,872,508 

26,437,350 

According  to  consular  reports,  exports  from  the  United 
States  to  Greece  increased  from  $1,123,511  in  1913-14  to 
$48,672,778  in  1919-20,  and  to  slightly  over  $37,800,000  in 
1920-21.  There  are  few  countries  which  show  a  like  in- 
crease during  the  war.  In  the  fiscal  year  ending  June  30, 
1914,  we  shipped  to  Egypt  goods  to  an  amount  of  $1,930,- 
108.  In  1920-21  our  total  exports  to  Egypt  were  $29,- 
118,357,  These  two  countries  bought  from  us  in  1916-17 
more  than  three  times  as  much  as  the  entire  Near  Eastern 
field  in  1913-14. 

It  may  be  pointed  out  that  we  have  special  ties  with 
Greece  since  there  are  more  Greeks  in  the  United  States 
than  in  any  country  in  the  world,  excepting  Greece. 
Americans  are  also  popular  in  Egypt  and  are  large 
purchasers  of  Egyptian  cotton,  the  most  important  product 
of  that  country.  It  must  be  remembered,  however,  that 
Egypt  has  long  been  a  British  dependency  and  notwith- 
standing the  new  degree  of  independence  gained  by  Egypt, 
British  trade  here  will  be  naturally  considerable. 

Turkey  furnishes  interesting  possibilities  for  trade  with 


OUR  TRADE  IN  THE  NEAR  EAST  327 

the  United  States  since  many  of  the  old  commercial  ties 
with  Europe  have  been  broken  and  because  of  the  need  of 
utilizing  the  great  potential  wealth  and  resources  of  this 
country. 

According  to  a  report  of  Louis  Heck  of  the  American 
Consular  Service,  in  the  few  years  before  the  war  we 
bought  from  Turkey  about  $22,000,000  worth  of  goods  each 
year,  of  which  tobacco  represented  about  half  of  the  total. 
We  sold  to  Turkey,  on  the  other  hand,  not  more  than  an 
average  of  $3,500,000  per  annum.  The  principal  American 
establishments  in  Turkey  were  educational  and  missionary. 
Next  to  the  French,  whose  religious  orders  have  been 
engaged  in  missionary,  and  educational  activities  in  Turkey 
since  the  days  of  Louis  XIV  and  longer,  there  were  more 
American  schools,  missions  and  colleges  than  those  of  any 
other  nationality,  ours  outnumbering  all  the  others  put 
together  except  the  French, 

We  also  have  the  most  prominent  and  conspicuous  col- 
leges, such  as  the  University  at  Beirut,  Robert  College  and 
the  Girls'  College  at  Constantinople,  the  International 
College  at  Smyrna,  and  several  large  and  admirably  con- 
ducted institutions  in  Egypt.  In  almost  every  city  of 
importance  in  Asia  Minor  and  Syria  the  traveler  is  likely 
to  see  a  large  and  well  constructed  group  of  buildings, 
standing  out  notably  among  the  other  structures  of  the 
city,  and  upon  inquiry  he  will  be  told  that  these  buildings 
belong  to  the  Americans. 

Hospital  and  medical  activities  were  among  the  main 
features  of  missionary  work  and  were  badly  needed  in  a 
country  where  extreme  ignorance  prevailed  and  doctors 
were  few  and  unskilled.  In  more  recent  years  other  prac- 
tical lines  have  been  taken  up,  so  that  to-day  Robert  College 
has  the  first  real  school  of  engineering  in  Turkey,  and 
plans  are  ready  for  agricultural  courses  for  both  Robert 
College  and  the  University  at  Beirut  as  soon  as  conditions 
permit  their  execution. 

Besides  the  schools  and  colleges,  we  had  the  buying  agen- 
cies of  the  various  American  tobacco  companies  and  the 


328       FOREIGN  TRADE  MARKETS  AND  METHODS 

MacAndrews  &  Forbes  Company;  the  selling  and  produc- 
tion agencies  of  the  Standard  Oil  Company  of  New  York, 
the  Vacuum  Oil  Company,  a  branch  of  the  Guaranty  Trust 
Co.  in  Constantinople;  American  Express  Co.  in  Constan- 
tinople, Cairo  and  Athens;  and  the  omnipresent  and 
widely  extended  organization  of  the  Singer  Sewing  Machine 
Company.  Beyond  these  principal  concerns  there  were  very 
few  that  were  distinctly  American  in  character.  There 
would  be  occasional  visits  from  American  business  men  who 
happened  to  go  to  Turkey;  or,  on  one  special  occasion  in 
recent  years,  there  was  the  attempt  to  obtain  a  concession 
for  a  1200-mile  railway  known  as  the  Chester  project,  which 
was  designed  to  open  up  valuable  mineral  regions,  and  for 
which  a  total  investment  of  $100,000,000  was  planned.  This 
scheme  was  defeated  in  1911  after  a  hard  fight,  principally 
by  German  opposition,  but  the  need  for  such  a  road  still 
exists,  and  had  it  been  constructed  before  the  war,  the 
strategic  position  of  Turkey  against  the  Russian  armies  in 
the  Caucasus  would  have  been  vastly  stronger. 

The  handicap  which  the  United  States  suffered  in  furnish- 
ing large  food  supplies,  especially  flour,  for  Turkey  sub- 
sequent to  the  signing  of  the  Armistice,  was  found  in  not 
having  an  American  bank  through  which  to  work.  It  was 
necessary  to  use  a  British  firm  and  a  British  bank  in  supply- 
ing American  food  products  to  render  this  assistance  to  a 
hungry  and  nearly  war  starved  city. 

The  arrival  of  350  workers  belonging  to  the  American 
Committee  for  relief  in  the  Near  East,  together  with  an 
international  mandate  commission  headed  by  Charles  R. 
Crane  and  Dr.  Henry  King  of  Oberlin  College  increased  in 
Turkey  the  high  opinion  of  America's  desire  to  play  fair 
and  to  assist  in  the  settlement  of  Near  Eastern  problems. 

Trade  with  this  section  has  been  greatly  helped  of  late 
by  new  lines  of  regular  and  direct  American  steamers  such 
as  we  have  never  had  in  the  past  to  the  Near  East.  In 
recent  shipping  lists  there  will  be  found  three  or  four 
vessels  leaving  each  month  from  American  ports  for  Con- 
stantinople and  other  points  in  the  Levant. 


OUR  TRADE  IN  THE  NEAR  EAST  329 

A  large  number  of  American  firms  have  been  sending 
tlieir  own  representatives  to  the  Levant,  but  in  this  we  have 
been  outstripped  by  the  British,  French,  Italian  and 
Japanese,  who  have  followed  the  policy  of  sending  large 
delegations  to  promote  trade  with  their  various  countries. 
At  Constantinople  there  was,  not  very  long  ago,  a  Japanese 
delegation  of  30  members  and  soon  afterwards  there  was  a 
large  importation  of  Japanese  cotton  goods.  Our  com- 
petitors in  this  section  are  capable  and  formidable.  Such 
corporations  and  its  subsidiaries  as  the  Levant  Co.  Limited, 
which  has  acquired  a  controlling  interest  in  the  largest 
British  trading  house  in  Turkey,  in  the  only  British  Bank, 
and  is  closely  affiliated  with  the  largest  and  leading  firms, 
is  one  of  Great  Britain 's  plans  for  the  resurrection  of  trade 
on  a  large  scale. 

The  British  control  of  the  oil  fields  of  Mesopotamia  as 
well  as  those  of  Arabia  and  Persia  which  are  among  the 
richest  in  the  world,  has  brought  under  Great  Britain's 
control  a  field  of  production  of  almost  inestimable  value. 

The  French,  moreover,  have  not  only  had  long  established 
connections  and  considerable  investments  in  Turkey,  but 
they  have  been  giving  attention  since  the  war  to  the  exten- 
sion of  their  trade  in  the  Turkish  Empire.  A  large  French 
Commission,  which  included  the  head  of  one  of  the  National 
Export  Associations  of  France,  has  visited  the  important 
trade  centers  of  the  Near  East.  The  French  have  a  certain 
advantage  in  the  ready  currency  with  which  the  French 
language  is  utilized  throughout  the  Levant  as  a  commercial 
medium  of  expression.  There  are  certain  other  advantages 
held  in  this  section  by  the  Italians  because  of  their  close 
proximity  and  by  reason  of  the  fact  that  they  have  fallen 
heir  to  many  of  the  Austrian  connections  with  the  Levant, 
particularly  in  matters  of  banking  and  shipping.  The 
Austrian  Lloyd  Steamship  Company,  which  was  the  largest 
and  most  important  fleet  of  vessels  in  Near  Eastern  waters, 
now  flies  the  Italian  flag  and  the  ships  are  reported  to  be 
running  on  approximately  their  old  schedules. 

The  activities  of  the  Greeks  in  this  section  have  been 


330      FOREIGN  TRADE  MARKETS  AND  METHODS 

confined  largely  to  trading  and  dealing  in  goods  imported 
from  other  countries  since  there  are  few  industrial  products 
in  Greece  to  export. 

An  American  banking  house  in  this  section  is  greatly 
needed,  not  only  for  commercial  transactions,  but  to  pro- 
vide a  basis  for  investigation,  investment  and  the  develop- 
ment of  resources  in  the  Near  East,  as  there  are  rich  mines 
in  Asia  Minor  of  copper,  coal,  iron,  silver,  lead,  zinc,  etc., 
which  are  only  waiting  to  be  scientifically  explored  and 
developed. 

In  this  agricultural  and  pastoral  section  where  irrigation 
and  farming  projects  on  a  large  scale  are  certain  to  come, 
all  kinds  of  agricultural  machinery,  tractors  and  motors  will 
be  required  previous  to  the  building  of  more  railways. 
There  is  a  great  need  of  hydroelectric  development.  It  is 
said  that  at  present  not  more  than  twenty  per  cent  of 
Turkish  agricultural  products  are  touched  by  any  but  the 
most  primitive  tools  and  with  methods  such  as  are  native 
to  the  country.  The  American  opportunity  for  the  develop- 
ment of  public  works  and  transportation  generally  is  patent. 

Turkey,  with  a  population  of  20,000,000  in  the  year  1914 
and  an  area  of  695,000  square  miles  (more  than  15  times 
the  area  of  Pennsylvania),  had  less  than  5000  miles  of 
railway  and  only  three  cities  had  electric  light  plants  or 
electric  street  railways.  It  seems  strange  to  realize  that 
Constantinople  itself  did  not  possess  telephones,  electric 
street  cars  or  lights  until  the  year  1913. 

The  American  automobile  market  which  has  already  been 
opened  in  so  many  foreign  lands  finds  in  this  region  almost 
virgin  soil.  In  1914  it  is  stated  that  there  was  less  than 
one  automobile  to  each  200,000  inhabitants  in  Turkey. 

In  spite  of  the  political  vicissitudes  of  Turkey  and  her 
debt  of  $2,000,000,000,  Turkish  money  has  been  worth  more 
in  exchange  than  any  other  paper  currency  of  the  former 
Central  Powers  and  is  slightly  better  than  that  of  such 
countries  as  Poland,  Czecho-Slovakia,  Jugoslavia  and 
Roumania. 

As  to  Bulgaria,  Serbia,  Roumania  and  Trans-Caucasus 


OUR  TRADE  IN  THE  NEAR  EAST  331 

there  will  be  found  opportunities  for  American  trade  as 
soon  as  our  manufacturers  and  traders  are  ready  to  seriously 
enter  these  fields. 

The  large  number  of  Bulgarian  students  at  Robert  Col- 
lege, the  considerable  immigration  from  Bulgaria  to  the 
United  States  numbering  upwards  of  75,000,  and  the  highly 
agricultural  and  pastoral  nature  of  the  country  requiring 
imported  manufactured  goods,  all  offer  inducements  to 
American  commerce. 

Serbia,  or  the  Kingdom  of  the  Serbs,  Croats  and  Slovenes, 
otherwise  known  as  Jugoslavia,  is  in  need  of  manufactured 
and  finished  articles,  while  the  population  is  sympathetic 
with  the  United  States  because  of  our  aid  in  the  war. 
There  is  an  estimated  surplus  of  cereal  production  in  Jugo- 
slavia for  the  past  year  which  should  provide  upward  of 
1,000,000  tons  of  grain  for  export.  There  will  be  need  of 
the  extension  of  credit  in  order  to  do  business  at  present 
in  this  country  and  probably  longer  credits,  in  most  of  the 
other  Near  Eastern  countries,  than  we  have  been  accus- 
tomed to  give. 

Roumania  with  her  agricultural  prosperity  and  oil  fields, 
having  about  the  same  area  as  Italy  and  a  population  of 
15,000,000,  also  large  areas  of  coal,  iron  and  copper  re- 
sources, is  the  one  country  in  this  section  to  which  the 
United  States  sold  more  than  it  bought  previous  to  the  war, 
the  balance  in  our  favor  being  about  4  to  1. 

While  Southern  Russia  presents  a  complex  and  uncertain 
condition  for  trade,  Trans-Caucasus  with  the  three  small 
republics  of  Georgia,  Armenia  and  Azerbaidjan,  has  also 
great  natural  resources,  especially  minerals.  In  1913  the 
Caucasus  produced  over  1,000,000  tons  of  manganese  of 
which  121,887  tons  were  sent  to  the  United  States.  Other 
mineral  products  include  copper,  cement,  salt,  coal  and  car- 
bonate of  potash.  Tobacco  and  licorice  root  and  hard  woods 
such  as  Circassian  walnut  have  also  been  coming  to  the 
United  States  from  this  region.  Trade  has  been  resumed 
to  a  certain  extent  with  the  Caucasus  and  there  has  been 


332      FOREIGN  TRADE  MARKETS  AND  METHODS 

talk  of  an  Anglo-Armenian  bank  and  a  British  project  in 
this  region  to  develop  hydroelectric  plants. 

As  to  our  trade  with  Persia  in  the  past  it  has  been  hardly 
worth  mentioning,  amounting  to  only  a  few  thousand  dol- 
lars a  year.  There  have  been  some  indications  in  late  years 
of  closer  relations  and  the  Shah  of  Persia  purchased  several 
hundred  thousand  dollars '  worth  of  Liberty  Bonds.  Previ- 
ous to  the  war  the  total  import  trade  of  Persia  amounted 
to  about  $40,000,000. 

Although  certain  sections  of  this  Near  Eastern  field  are 
at  present  more  or  less  demoralized  because  of  the  results 
of  the  war,  European  traders  are  sparing  no  means  to 
establish  firmly  their  positions  there.  It  will  take  effort 
for  American  traders  to  secure  firm  and  abiding  markets, 
but  that  this  great  section  of  the  earth  should  not  be 
neglected  by  us  goes  without  saying. 

There  are  signs  of  progress  in  the  recent  establishment 
of  American  Chambers  of  Commerce  in  Egypt  with  head- 
quarters at  Alexandria,  and  the  American  Chamber  of 
Commerce  in  Greece  with  an  office  and  secretary  at  Athens. 
American  automobile  business  has  also  gained  headway  re- 
cently in  the  Levant. 

It  has  been  truly  stated  that  the  discovery  of  the  Ameri- 
can continent  formed  one  of  the  chief  causes  contributing 
to  the  decline  of  the  trade  routes  from  Europe  to  the  East 
by  way  of  Turkey  as  well  as  to  the  eclipse  of  Constantinople, 
of  the  Italian  maritime  republics,  and  the  trade  of  the 
eastern  Mediterranean. 

It  would  seem  appropriate  that  America  and  its  Ameri- 
can commercial  leaders  with  American  capital,  brains  and 
stable  business  methods,  should  take  their  part  in  rebuild- 
ing the  economic  structure  of  this  historic  region,  thereby 
utilizing  particularly  our  American  manufactures  and 
machinery  in  a  territory  where  perhaps  they  are  more 
needed  at  present  than  in  any  other  section  of  the  earth. 


CHAPTER  XXII 

AMERICAN  OVERSEAS  TRADE  WITH  AFRICA 

To  the  last,  to  the  largest  empire, 

To   the   map   that   is   half   unrolled! — Kipling. 

It  is  many  years  ago  now  since  Livingston  sent  back 
word  from  darkest  Africa  to  his  English  constituency,  say- 
ing, "The  end  of  the  exploration  is  the  beginning  of  the 
enterprise. ' ' 

For  a  considerable  period  of  years  Africa  has  been  in 
the  commercial  eye  of  various  nations.  Great  Britain  with 
her  protectorate  over  Egypt  in  the  Valley  of  the  Nile  re- 
placed former  French  influence  in  that  section  and  although 
the  inhabitants  of  this  most  ancient  country  have  been 
given  recently  a  larger  share  of  national  control,  there  is 
no  doubt  that  British  influence  and  British  trade  wiU 
dominate  in  the  ancient  land  of  the  Pharaohs  for  many 
years  to  come. 

When  one  considers  what  the  English  have  done  through 
the  foundation  of  government  schools  in  Egypt,  in  the 
reclaiming  of  vast  tracts  of  Egyptian  land  for  agriculture, 
in  large  engineering  and  railroad  enterpris&s  along  the  Nile, 
as  well  as  in  their  contribution  to  the  stabilizing  of  business 
and  government  through  the  work  of  such  men  as  Cromer 
and  Kitchener,  much  credit  must  be  given  to  the  colonial 
Britisher. 

Egypt  is  located  strategically  at  the  gateway  between 
the  great  trade  routes  of  the  East  and  "West.  Herodotus, 
more  than  a  thousand  years  ago,  said:  "I  speak  at  length 
about  Egypt,  because  it  contains  more  marvelous  things 
than  any  other  country,  things  too  strange  for  words."  The 

333 


334        FOREIGN  TRADE  MARKETS  AND  METHODS 

Greek  historian  goes  on  to  point  out  in  detail  some  of  the 
oddities,  and  to  the  Westerner  the  abnormalities  of  this 
Oriental  land : 

Other  nations  in  weaving  thi-ow  the  woof  up  the  warp,  but 
the  Egyptian  throws  it  down;  in  othex-  countries  the  Priests  of 
the  Gods  wear  hair,  in  Egypt  they  are  shaved;  in  other  countries 
the  dwellings  of  men  are  sejDarated  from  those  of  beasts,  in 
Egypt  men  and  beasts  live  together.  Other  nations  fasten  their 
ropes  and  hooks  to  the  outside  of  their  sails,  but  the  Egyptians 
to  the  inside.  The  Greeks  write  and  read  from  left  to  right,  but 
the  Egyptians  from  right  to  left. 

And  these  peculiarities  of  the  Egyptians  may  be  traced 
virtually  to  every  phase  of  this  people's  life.  It  is  ancient 
as  it  is  strange ;  more  than  medieval,  this  Egypt,  unchange- 
ably and  inexplicably  ancient,  a  part  of  the  slow  mov- 
ing east,  the  land  of  tiraelessness ;  as  the  Khedive  Ismail 
once  said,  '*  To-day  is  here  the  same  as  yesterday,  and  to- 
morrow will  be  the  same  as  to-day ;  and  so  it  has  been,  and 
so  it  will  be,  for  thousands  of  years. ' ' 

It  is  like  a  page  from  the  old  pictorial  family  Bible  out 
of  which  we  spelled  the  letters  at  our  mother's  knee. 

In  sailing  down  the  Nile  you  see  the  Egyptian  peasant 
using  the  same  hand  propelled  shadoof  that  his  fathers 
used  in  the  time  of  the  Pharaohs,  while  grave  fellaheen  ride 
solemnly  along  the  paths  upon  donkeys  that  might  have 
been  the  direct  descendants  of  those  that  bore  father 
Abraham  when  he  went  out  to  a  land  that  he  knew  not  of. 
In  the  village  "kuttabs"  (small  Moslem  schools)  I  found 
the  ancient  looking  Sheikh  in  turban  and  flowing  robes, 
exactly  as  he  might  have  looked  ten  centuries  ago,  with  his 
band  of  half -clad  boys  about  him,  repeating  in  a  sing  song 
refrain  the  long  unintelligible  words  of  the  Koran,  keeping 
time  with  their  swaying  bodies,  while  the  school-master 
accents  their  recital  by  expressive  grunts  and  flourishes  of 
his  pedagogical  cane.  In  short,  if  you  have  known  Egypt 
once,  you  have  known  it  for  all  time.  In  the  words  of  Miss 
Amelia  B.  Edwards: 


AMERICAN  OVERSEAS  TRADE  WITH  AFRICA    335' 

The  physique  and  life  of  the  modern  fellah  is  almost  identical 
with  the  physique  and  life  of  that  ancient  Egyptian  laborer  whom 
we  know  so  well  in  the  wall  paintings  of  the  tombs.  Square  in 
the  shoulders,  slight  but  strong  in  the  limbs,  full  lipped,  brown 
skinned,  we  see  him  wearing  the  same  loin  cloth,  plying  the  same 
shadoof,  ploughing  with  the  same  plough,  preparing  the  same 
food  in  the  same  way,  and  eating  it  with  his  fingers  from  the 
same  bowl  as  did  his  forefathers  of  six  thousand  years  ago — • 
water  is  brought  to  table  in  the  same  jars  manufactured  at  the 
same  town  as  in  the  days  of  Cheops  and  Cephron;  and  the 
mouths  of  the  bottles  are  filled  in  precisely  the  same  way  with 
fresh  leaves  and  flowers.  A  Sheikh  still  walks  with  a  long  staff; 
and  the  pleasure  boat  of  the  modem  Governor  or  Mudir,  as  well 
as  the  dahabeeyah  hired  by  the  European  traveler,  reproduces 
in  all  essential  featn.res  the  painted  galley  represented  in  the 
tombs  of  the  Kings. 

A  New  Industrial  Order. — The  first  question  in  this 
country  is  an  agricultural  or  industrial  one,  as  it  should  be, 
for  the  success  of  Egj'pt  like  that  of  any  other  nation  is 
based  first  upon  the  land,  and  the  country  that  has  not 
fostered  a  steady  and  ever  expanding  material  development 
will  vainly  strive  to  make  up  for  this  deficiency  in  any 
superstructure,  however  perfect.  This  industrial  or  utili- 
tarian awakening  has  been  so  rapid  and  so  decided  that 
the  Egyptian  has  hardly  recovered  himself  sufficiently  to 
realize  what  it  is  all  about. 

Seventy  years  ago  the  Indian  mail  was  transported  in 
a  box  which  was  locked  by  the  Consul  in  Alexandria  and 
went  to  Suez  on  a  camel.  The  first  railway  of  Egypt  from 
Alexandria  to  Cairo  in  1855  was  the  promise  of  a  railway 
system  which  now  conveys  the  traveler  with  every  modern 
convenience  from  Alexandria  to  Khartoum.  It  seems  well 
nigh  incredible  to  think  that  only  a  half  century  ago  in 
this  country  the  coal  and  merchandise  for  the  mail  steamers 
were  conveyed  by  caravans  across  country,  these  caravans 
frequently  consisting  of  three  thousand  camels;  or  that 
during  the  same  period  the  opening  of  the  Suez  Canal  and 
the  country  wide  plans  for  irrigation  and  national  and 


336        FOREIGN  TRADE  MARKETS  AND  METHODS 

international  communication  have  united  Egypt  with  the 
world 's  federation  of  modern  business.  The  commerce  from 
all  the  seas  of  the  world  is  beginning  to  flow  into  Egypt. 
She  is  leaping  into  the  light  of  a  new  day.  Her  cotton, 
her  credit,  her  farming,  and  her  institutions  are  all  com- 
paratively new  and  strange  in  their  modern  dress. 

To  the  people  at  home,  as  well  as  to  the  nations  abroad, 
this  industrial  renaissance  is  absorbingly  interesting.  ''To 
watch  the  immemorial  culture  of  the  East,"  writes  Ken- 
neth J.  Freeman,  "slow  moving  with  the  weight  of  years, 
dreamy  with  centuries  of  deep  meditation,  accept  and 
assimilate  as  in  a  moment  of  time  the  science,  the  machin- 
ery, the  restless  energy  and  practical  activity  cf  the  "West, 
is  a  fascinating  employment." 

The  Egyptian  farmer  is  quite  another  factor  in  Egypt's 
life  than  he  was  when  the  British  found  him  on  their  occu- 
pation thirty  years  ago.  Egypt  has  to-day  one  million  two 
hundred  thousand  yeomen,  each  owning  upwards  of  fifty 
acres  of  land  apiece,  and  showing  signs  of  becoming  no 
longer  "voiceless  masses,"  but  citizens  with  wealth,  vested 
rights  and  intelligent  claims.  These  fellaheen  are  primarily 
responsible  for  the  fact  that  in  1910  the  cotton  exports 
from  Egypt  amounted  in  value  to  24,242,000  Egyptian 
pounds,  that  sugar  was  exported  to  the  amount  of  515,000 
tons,  and  that  288,000  Egyptian  pounds  were  realized  from 
the  export  of  rice,  while  practically  a  new  day  of  industry 
has  been  made  to  dawn,  by  these  sturdy  fellaheen,  in  the 
cultivation  and  harvest  of  garden  produce.  The  majority 
of  these  agriculturists  have  received  water  for  their  land 
from  the  hands  of  the  English  engineer ;  they  are  no  longer 
bullied  and  frightened  from  their  rights  by  over-bearing 
village  Sheikhs,  or  deprived  of  their  lands  by  arbitrary 
edicts  of  a  foreign  Pasha.  The  man  of  Egypt  no  longer 
puts  out  an  eye  to  evade  military  service  as  he  did  in  the 
old  days  of  oppression,  neither  is  it  his  chief  aim  in  life  to 
evade  the  extortions  of  the  tax  gatherer. 

In  the  next  generation  these  blue  skirted  peasants,  whom 
the  Nile  tourist,  floating  down  the  river  in  the  luxury  of  his 


AMERICAN  OVERSEAS  TRADE  WITH  AFRICA    337 

dahabeeyah,  photographs  at  his  circling  sakieh,  or  stoop- 
ing and  straining  at  the  shadoof,  will  be  men  to  whom  the 
very  mention  of  such  atrocities  will  seem  unbelievable.  They 
will  be  men  of  rich  properties  and  growing  minds,  separat- 
ing themselves  more  and  more  from  that  herd  instinct 
which  is  the  bane  of  belated  races.  It  is,  indeed,  doubtful 
whether  history  records  another  instance  of  so  sudden  a 
leap  from  abject  misery  and  slavish  poverty  into  the  begin- 
ning of  affluence  and  material  prosperity  as  are  now  in 
evidence  in  agricultural  Egypt. 

In  spite  of  this  general  apathy  among  the  masses  of 
Egyptians,  whose  only  idea  of  the  modern  Egyptian 
awakening  is  that  which  comes  to  their  material  apprecia- 
tion, one  finds  in  the  large  cities  a  new  sense  of  representa- 
tive responsibility.  Witness  the  new  schools  for  law,  which 
are  turning  out  each  year  hundreds  of  Egyptian  students 
educated  in  modem  judicial  procedure;  in  short,  the 
cynosure  of  the  vocational  hopes  of  Egyptian  students  have 
been  for  the  past  decade  riveted  upon  the  profession  of 
lawyer  or  judge.  Scores  of  new  schools  have  been  estab- 
lished of  late  by  the  Moslems  and  the  Copts,  having  directly 
in  view  the  making  of  citizenship  through  the  avenues  of 
practical,  commercial  and  legal  education.  These  institu- 
tions, together  with  those  in  charge  of  the  foreign  mission- 
aries, whose  educational  ideals  are  increasingly  progressive 
and  utilitarian,  are  crowded  to  overflowing  with  Egyptian 
young  men  determined  that  the  foreign  Syrian  or  Greek 
or  European  will  not  filch  from  them  much  longer  the  prizes 
of  commercial  and  national  citizenship.  There  is  hardly  a 
vocation  with  which  we  are  familiar  in  the  West  which  is 
not  to-day  beginning  to  receive  attention  by  these  coming 
citizens. 

Alexandria,  the  city  which  was  famous  in  other  centuries 
for  its  trade  as  well  as  for  its  learning,  now  holds  the 
possibility  of  again  becoming  a  great  world  and  maritime 
port. 

Among  the  growing  industries  of  this  old  country  are 


338        FOREIGN  TRADE  MARKETS  AND  METHODS 

those  involving  Egyptian  cotton  and  other  textiles,  cereals, 
tobacco,  skins  and  leather  goods,  as  well  as  many  other 
commodities  like  drugs,  metals  and  chemicals  which  figure 
among  Egypt's  modern  exports. 

Algeria. — As  Great  Britain  has  laid  the  basis  of  world 
trade  in  Egypt  and  the  Sudan,  so  France  has  brought  to 
Algeria,  Morocco  and  the  fruitful  shores  of  the  Southern 
Mediterranean,  the  development  of  native  resources,  the 
construction  of  military  roads,  the  cultivation  of  huge 
vineyards,  and  through  her  colonists  by  actual  example 
engaging  in  agricultural  pursuits. 

The  author  was  amazed  a  few  years  ago  in  taking  a  some- 
what extended  journey  through  Algeria  to  see  the  manner 
in  which  French  civilization  had  stamped  itself  upon  the 
ancient  and  somewhat  backward  civilization  composed  of 
Kabyles,  Arabs  and  a  mixture  of  old  European  races.  In 
this  historic  section  where  Romans,  Africans  and  Byzan- 
tines met  and  fought  for  supremacj^  in  other  centuries, 
modern  industries  and  opportunities  are  coming  into 
being. 

Imports  into  Algeria  during  the  period  January  to  March, 
1920,  amounted  to  $56,204,109  and  exports  to  $97,283,773, 
making  a  total  trade  of  $153,487,882,  which  was  an  increase 
of  $42,954,466  over  1919. 

In  the  Central  Coastal  Region  and  in  South  Africa  par- 
ticularly modern  foreign  trade  has  made  enormous  strides 
forward.  Tne  loss  to  Germany  of  provinces  through  the 
exigencies  of  the  war  have  given  Great  Britain  a  firm  hold 
upon  the  trade  of  Central  Africa.  That  this  trade  is  in- 
creasing and  that  great  possibilities  exist  for  advance  is 
shown  by  the  fact  that  the  Accra  district,  for  example,  in 
British  West  Africa  leads  all  other  sections  in  the  world 
to-day  in  cacao  production,  sending  to  the  United  States 
alone  more  than  100,000  tons  yearly. 

South  Africa. — In  order  to  understand  the  resources 
and  economic  conditions  of  South  Africa  it  is  necessary 
to  know  something  of  the  physical  structure  of  the  country. 
The  land  south  of  the  Zambesi  river  mav  be  divided  into 


AMERICAN  OVERSEAS  TRADE  WITH  AFRICA     339 

three  regions.  There  is  a  low  strip  of  land  bordering  on 
the  Indian  Ocean  which  extends  from  Cape  Town  past 
Durban,  Delagoa  Bay  and  Beira  to  the  south  of  the  Zambesi. 
Behind  this  low  coast  belt  lies  rough,  hilly  country  which 
gradually  rises  as  one  goes  inland  to  an  altitude  ranging 
from  3000  to  7000  feet  and  in  some  places  reaching  an 
altitude  of  11,000  feet.  A  vast  high  tableland  fills  in  the 
interior  behind  this  Quathlamba  Eange.  Thus  the  main 
features  consist  of  this  considerable  mountain  chain  with 
rocky,  hilly  country  between  it  and  the  low  lying  coast 
plain,  and  the  vast  tableland  stretching  behind  it  into  the 
interior. 

The  climate  is  extremely  dry,  the  air  being  clear  and 
stimulating.  The  heat  is  intense,  but  generally  cooler  than 
that  found  at  a  similar  latitude  in  northern  hemispheres. 
Although  the  sun  is  very  hot,  sunstroke  is  unasual  and  the 
natives  do  not  have  to  be  on  constant  guard  against  the  sun 
as  in  India  and  other  countries.  Most  of  South  Africa  is 
high  and  dry,  but  all  of  it  is  hot.  The  freshness  and  purity 
of  the  air  tend  to  produce  a  vigorous  race  which  can  resist 
the  heat.  The  high  and  dry  parts  are  naturally  the  most 
healthful.  In  the  low  belt,  where  it  is  wet  and  swampy, 
malaria  prevails  and  is  the  scourge  of  the  east  and  west 
coast. 

The  coast  has  extremely  few  harbors  and  unfortunately 
the  country  itself  has  few  rivers  and  such  as  there  are 
practically  unserviceable  for  navigation  three-fourths  of 
the  year.  This  is  one  reason  why  the  continent  remained 
unexplored  for  such  a  long  time.  Unlike  North  and  South 
America,  where  explorers  penetrated  the  country  by  follow- 
ing its  waterways,  in  South  Africa  they  were  obliged  to  use 
ox-wagons  and  make  frequent  stops  to  feed  the  animals. 

The  chief  sources  of  the  country's  wealth  are  its  agricul- 
tural land,  its  pasture  land  and  its  minerals.  Agriculture 
is  the  least  important  of  these.  The  chief  agricultural 
products  are  wheat,  oats,  maize,  corn,  fruit  and  sugar. 
In  the  past  more  attention  has  been  given  to  pastoral 
pursuits  than  to  the  cultivation  of  crops.    In  this  way  the 


340        FOREIGN  TRADE  MARKETS  AND  METHODS 

great  agricultural  resources  of  the  country  have  scarcely 
been  touched.  The  future  of  the  country  will  depend  to 
a  great  extent  on  the  development  of  these  resources  and 
the  government  is  giving  serious  attention  to  such  develop- 
ment. The  interior  land  which  is  too  dry  for  successful 
agriculture  furnishes  excellent  grazing  country.  The  rais- 
ing of  cattle,  sheep  and  goats  has  been  for  years  a  well 
developed  industry.  The  mineral  source,  the  last  to  be- 
come known,  opened  a  new  period  for  South  Africa.  It 
brought  crowds  of  immigrants  and  helped  to  develop  trade. 
This  mineral  region  is  one  of  the  world's  best.  The  gold 
mines  of  the  Transvaal  are  the  richest  in  the  world  and  the 
diamond  mines  of  Kimberley  supply  98  per  cent  of  all  the 
diamonds  used.  The  working  of  these  mines  is  the  greatest 
industry  of  the  country.  Just  what  will  happen  when  these 
mines  are  exhausted  is  hard  to  predict.  There  will  be  no 
reason  then  for  the  mine  workers  to  stay  and  population 
may  decline  or  the  people  may  turn  to  other  activities. 

South  Africa,  like  many  other  countries,  experienced  dif- 
ficulty in  the  latter  part  of  the  war  period  in  obtaining 
urgently  needed  supplies  from  foreign  countries  and  like 
other  countries,  she  too  began  to  develop  more  extensively 
her  own  resources.  This  resulted  in  a  widespread  develop- 
ment along  industrial  lines.  These  industries  continued  to 
be  active  in  1919.  Many  of  them  enlarged  their  plans  and 
increased  their  output,  while  new  ones  were  begun.  In  the 
Union  of  South  Africa  since  1915  no  less  than  2000  new 
factories  have  been  established  and  the  output  per  annum  of 
these  factories  is  approximately  £61,000,000  (.$297,000,000). 
The  industrial  production  has  increased  50  per  cent  in  the 
past  four  years  and  the  country  is  rapidly  advancing  in  the 
direction  of  becoming  self-supporting  in  all  the  necessaries 
of  life.  The  year  1919  was  a  most  prosperous  one  for 
South  Africa.  The  universal  demand  for  raw  material 
stimulated  production  and  the  country  benefited  by  the 
prevailing  high  prices.  Further  proof  of  the  increased 
activity  in  business  conditions  was  to  be  seen  in  the  large 
deposits  accumulated  in  the  banks. 


AMERICAN  OVERSEAS  TRADE  WITH  AFRICA      341 

The  total  foreign  trade  of  the  Union  of  South  Africa, 
which  is  about  one-sixth  the  size  of  the  United  States  and 
is  composed  of  four  provinces,  Cape  of  Good  Hope,  Natal, 
Transvaal,  Orange  Free  State,  was  the  largest  since  the 
formation  of  the  Union  in  1910.  This  trade  in  1919  was 
valued  at  $672,942,343  as  compared  with  $575,198,034  for 
the  year  1918  and  $532,671,000  for  the  pre-war  year  of 
1913.  In  1919  the  exports  including  raw  gold  were  valued 
at  $425,766,974  and  the  imports  $247,175,399.  The  excess 
of  exports  over  imports  amounted  to  $178,591,575.  This 
showed  a  decided  increase  over  that  of  1918.  In  1913 
54.4  per  cent  of  the  total  imports  into  South  Africa  came 
from  the  United  Kingdom  and  only  9.5  per  cent  from  the 
United  States.  In  1919  the  percentage  from  the  United 
Kingdom  was  45.4  per  cent,  while  that  of  the  United  States 
had  risen  to  24.1  per  cent. 

Considerable  apprehension  was  felt  in  South  Africa  con- 
cerning the  general  slump  in  trading  and  the  marked  de- 
cline in  all  prices  in  1920.  The  total  value  of  the  declared 
exports  of  Cape  Town  to  the  United  States  for  the  six 
months  ended  June  30,  1920,  amounted  to  $2,912,163,  as 
against  $3,164,756  in  January-June,  1919,  being  a  decrease 
of  $252,593.  The  recent  decline  in  prices  in  South  African 
markets  of  wool,  skins,  hides,  feathers  and  diamonds,  as 
well  as  the  action  of  banks  in  refusing  to  handle  foreign 
exchange  is  largely  responsible  for  the  decline.  This  gen- 
eral fall  in  prices  has  reacted  unfavorably  on  the  commod- 
ities produced  for  export  in  the  Union  of  South  Africa. 

According  to  a  report  by  Consul  Fred  D.  Fisher,  July 
31st,  1920,  a  Chamber  of  Commerce  of  the  United  States  of 
America  was  formed  in  South  Africa  at  a  meeting  held 
in  the  American  consulate  in  Johannesburg  on  July  30th. 

In  organizing  this  chamber  the  constitution  of  the  Ameri- 
can Chamber  of  Commerce  in  Argentina  has  been  followed, 
with  such  alterations  and  additions  as  local  conditions 
necessitate.  In  order  to  give  it  a  legal  status  and  to  limit 
the  liability  of  its  members,  the  chamber  is  duly  registered 
in  the  Transvaal  Province. 


342       FOREIGN  TRADE  MARKETS  AND  METHODS 

The  following  table  gives  some  idea  of  the  trade  develop- 
ment in  the  Union  of  South  Africa: 


Principal  Exports 

1912 

1918 

Raw  Gold 

$186,600,000 

44,500,000 

12,700,000 

23,280,000 

8,240,000 

5,850,000 

4,720,000 

2,100,000 

1,192,000 

$34,200,000 

Diamonds 

431,000 

Ostrich  Feathers 

47,200,000 

Wool 

11,180,000 

Hides 

4,870,000 

Coal 

Mohair 

CoDoer 

Tin 

Totallmports  ($U.  S.).... 
Total  Exports  ($  U.  S.) 

203,300,000 
324,100,000 

240,800,000 
160,700,000 

Membership  in  the  chamber  is  open  to  American  firms 
and  individuals  resident  in  any  part  of  the  Union 
of  South  Africa,  Portuguese  East  Africa,  Belgian  Congo, 
South  West  Africa  and  other  protectorates.  The  officers 
elected  for  the  remainder  of  the  year  1920,  were:  Presi- 
dent, C.  D.  Healy,  manager  of  the  Standard  Oil  Com- 
pany; vice  president,  Frederick  V.  Green,  South  African 
representative  of  the  Baldwin  Locomotive  Works ;  secretary, 
E.  W.  Harris,  joint  manager  of  the  Denver  Rock  Drill  & 
Machinery  Company;  treasurer,  W.  Otis  Bullock,  manag- 
ing director  of  the  Colonial  Banking  &  Trust  Company. 

It  is  the  desire  of  the  chamber  to  maintain  cordial  cooper- 
ation with  the  United  States  Chamber  of  Commerce  at 
Washington  and  with  other  chambers  in  the  United  States 
interested  in  the  extension  of  American  trade  and  enter- 
prise in  South  Africa. 

Industrial  Development  in  South  Africa. — That  there  is 
far-reaching  reason  for  such  a  Chamber  of  Commerce  is 
revealed  by  examining  the  official  trade  returns  for  the 
Union  of  South  Africa  for  the  third  quarter  of  1920.    These 


AMERICAN  OVERSEAS  TRADE  WITH  AFRICA      343 

returns  show  an  enormous  increase  over  the  foreign  trade 
of  the  corresponding  quarter  of  1919,  according  to  report 
made  not  long  ago  by  the  Foreign  Trade  Bureau  of  the 
Guaranty  Trust  Company.  Imports  increased  by  well  over 
$16,000,000  and  exports  by  nearly  $36,000,000,  exclusive  of 
raw  gold.  The  total  value  of  imports  was  about  $80,000,000 
and  that  of  exports  by  close  to  $116,000,000,  including  raw 
gold,  which  amounted  to  a  little  over  $32,000,000.  Exports 
of  wool  were  in  the  neighborhood  of  $43,000,000, 

A  considerable  expansion  is  expected  to  take  place  in  the 
production  of  fertilizers,  where  much  raw  material,  such 
as  offal  from  abattoirs  and  crayfish  canneries,  which  might 
be  converted  into  fertilizers,  is  allowed  to  go  to  waste. 

A  growing  demand  for  railway  truckage  is  reported  from 
every  part  of  the  Union.  The  railway  finds  this  demand 
difficult  to  meet,  although  new  freight  cars  are  constantly 
being  placed  in  service. 

During  the  month  of  May,  the  Johannesburg  municipality 
approved  plans  for  new  buildings,  including  additions  and 
alterations  to  the  value  of  $800,000.  Building  materials 
are  very  scarce  and  prices  are  increasing,  particularly  on 
lumber,  but  nothing  seems  to  check  the  building  progress. 

In  an  annual  report  of  the  Department  of  Mines  and 
Industries,  an  extract  which  appears  in  the  Chamber  of 
Commerce  Journal  of  London,  shows  a  promising  industrial 
situation  in  the  Union  of  South  Africa.  The  following 
notes  regarding  industries  in  that  section  reveal  the  present 
and  future  possibilities: 

Cotton  and  Fiber:  Much  more  interest  is  now  being  shown 
in  the  cultivation  of  cotton.  Even  sugar  planters  are  going  in 
for  its  cultivation  to  some  extent.  With  a  greater  area  under 
cotton  there  will  be  larger  supplies  of  cotton  seed  available  for 
oil  extraction,  and  undoubtedly  these  supplies  of  cotton  seed  will 
be  treated  within  the  Union.  Another  oil-seed  bearing  crop  is 
flax,  about  which  and  the  linseed  obtained  therefrom  numerous 
inquiries  have  been  received.  Mention  should  also  be  made  of 
sisal,  the  cultivation  of  which  has  greatly  increased,  and  at  no 
far  distant  date  the  Union  should  be  supplying  its  own  require- 


344       FOREIGN  TRADE  MARKETS  AND  METHODS 

ments  of  sisal  hemp  for  the  manufacture  of  rope,  twine,  sacking, 
etc.,  an  industry  which  has  made  gxeat  progi-ess  during  1918. 

Foodstuffs:  Additional  cold  storage  works  and  depots  were 
erected  during  1918,  while  the  production  of  cheese,  bacon,  butter, 
condensed  milk,  foodstuffs  from  cereals  and  cereal  by-products, 
such  as  starch,  glucose,  dextrine,  malt  and  malt  extracts"  show 
highly  satisfactory  increases. 

General  Industries :  Very  gratifying  progress  has  been  made  in 
the  production  of  drugs  and  chemicals,  paints,  soaps  and  candles, 
sugar  by-products,  cement  and  cement  manufacture,  furniture, 
glassmaking,  boots  and  shoes,  pickles  and  condiments,  glue,  fer- 
tilizers, basketware,  rubber  goods,  sheep  and  cattle  dij^s,  and  iron- 
smelting.  A  tin-smelting  works  has  been  started,  while  in  the 
production  of  coke  a  commencement  has  been  made  with  by- 
product plants. 

Future  Possibilities :  In  regard  to  future  possibilities  the  Report 
points  out  that  the  present  is  undoubtedly  a  favorable  oppor- 
tunity for  the  investor  to  put  capital  into  the  development  of 
the  Union  resources.  Great  possibilities  lie  in  the  direction  of 
steel  production,  of  coal  by-product  and  maize  by-product  indus- 
tries, of  woolen  manufacture,  fiber  and  cotton  production,  ship- 
building and  repairing,  and  the  development  of  the  deep  sea 
fisheries.  In  that  section  of  the  Report  dealing  with  the  produc- 
tion of  base  metals  and  minerals,  it  is  noted  that  the  Union  is 
to-day  the  world's  leader  not  only  in  the  production  of  gold  and 
diammids,  but  also  of  corundum,  and  that  it  possesses  the  largest 
known  reserves  of  these  minerals.  In  the  production  of  asbestos 
the  Union  comes  fourth,  and  in  coal  it  is  the  eleventh  largest 
producer.  Comparing  the  year  1918  with  1913,  there  has  been 
an  increase  in  the  production  of  salt,  lime,  corundum,  asbestos, 
gypsum,  soda,  magnesite  and  graphite.  Copper,  tin  and  lead 
show  an  appreciable  decrease  in  output,  but  on  the  other  hand, 
many  other  base  metals  and  minerals  have  been  produced  in 
increasing  quantities,  which  do  not  figure  in  the  pre-war  tables, 
among  them  being  iron  ore,  iron  pyrite,  iron  oxide,  manganese, 
tungsten  and  mica.  The  Union  is  also  suppljang  the  whole  of  the 
local  demand  for  talc  and  talc  products.  The  greatest  progress 
has  been  made  in  the  production  of  asbestos  and  corundum,  and 
it  is  promising  to  note  that  both  of  these  industries  are  capable 
of  very  great  expansion.  No  other  counti*y  in  the  world  can 
compete  with  the  Union  as  regards  varieties  and  fibres  of  asbestos. 
Another  good  sign  in  this  connection  also  is  the  announcement  in 


AMERICAN  OVERSEAS  TRADE  WITH  AFRICA    345 

the  Report  that  a  beginning  has  been  made  in  the  manufacture 
of  asbestos  goods  of  excellent  quality,  there  being  made  locally 
roofing,  slates  and  tiles,  boiler  lagging,  stove  bricks,  jointing, 
packing,  etc. 

Already  American  engineers  and  American  business  men 
have  had  a  part  in  the  development  of  the  "dark  con- 
tinent." American  mining  engineering  has  always  been 
in  great  demand.  Both  at  the  time  of  the  great  diamond 
discovery  in  1867  to  1870,  and  when  gold  was  discovered 
about  the  year  1887,  the  lives  of  the  people  both  black  and 
white  in  this  vast  country  were  changed  quickly  by  these 
activities.  In  this  development  the  American  engineer  by 
reason  of  his  experience,  education  and  resourcefulness  took 
a  leading  part,  and  the  salaries  ranged  all  the  way  from 
$15,000  to  $50,000  with  extras  for  group  mining  and  con- 
sulting engineers.  To-day  the  Transvaal  with  its  gold  mines 
employing  20,000  white  skilled  laborers  and  about  20,000 
natives,  furnish  problems  as  well  as  possibilities  for  world 
trade.  It  is  significant  that  never  has  the  supply  of  labor 
for  this  industry  exceeded  the  demand.  Here  are  mixed 
populations  such  as  few  places  of  the  earth  present,  Cornish- 
men,  Dutchmen,  barbarian  nationalities,  Britishers,  and  a 
great  conglomeration  of  peoples  from  varied  climes  and  of 
diverse  racial  strains. 

While  certain  of  the  gold  mines  of  the  Transvaal  are 
being  abandoned  as  unprofitable,  new  ones  are  being  opened 
and  developed,  chiefly  on  what  is  termed  the  East  Rand. 
In  spite  of  the  fact  of  the  increase  in  all  costs  of  mining, 
together  with  Government  taxation  and  restrictions,  the 
price  of  an  ounce  of  gold  remains  at  the  old  standard  and 
it  is  asserted  by  the  mining  companies  that  it  costs  4  per 
cent  to  send  bullion  from  the  Transvaal  to  London,  this 
including  all  costs. 

Belgian  Congo. — Northward  from  the  Zambesi  River  to 
the  Red  Sea  stretches  the  great  eastern  highland  which 
reaches  its  most  extensive  development  in  the  region  about 
Victoria  Nyanza.    The  average  elevation  of  this  highland 


346       FOREIGN  TRADE  MARKETS  AND  METHODS 

is  over  5000  feet  except  in  Abyssinia  where  it  rises  over 
considerable  areas  to  the  height  of  6000,  8000  and  10,000 
feet-  The  most  significant  feature  of  this  region  is  the 
system  of  so-called  rift-valley  in  which  lie  the  majority 
of  the  great  African  lakes.  In  West  Central  Africa  we 
find  the  Congo  Basin  which  surpasses  the  area  of  the 
Mississippi  Basin  by  175,000  square  miles.  All  of  this 
area  is  an  elevated  plain  which  slopes  gradually  toward  the 
middle  west.  The  river  Congo  which,  excepting  the  Nile, 
is  the  longest  and  largest  in  Africa,  with  its  tributaries, 
not  only  drains  nearly  the  entire  territory  but  provides 
the  main  transportation  facilities  of  this  region. 

Belgian  Congo,  formerly  Congo  Free  State,  was  annexed 
to  Belgium  in  1907  with  the  king  of  the  Belgians  at  its 
head.  It  is  bounded  on  the  north  by  French  Equatorial 
Africa.  Rubber  is  the  chief  product  and  export.  Some 
of  the  other  exj)orts  are  ivory,  raw  gold,  palm  kernels, 
palm  oil,  raw  copper,  cacao  and  coffee.  The  chief  imports 
are  textiles,  boats  and  machinery,  beverages  and  foodstuffs. 
Copal,  a  resinous  gum,  is  found  in  large  quantities  in  the 
forests  of  the  central  Congo.  This  is  used  largely  in  the 
manufacture  of  varnishes  and  is  especially  valuable  be- 
cause it  is  hard  and  transparent.  It  is  now  being  shipped 
principally  to  Antwerp.  The  exportation  of  copal  from  the 
Belgian  Congo  during  recent  years  has  been  as  follows: 
in  1916,  8677  tons;  in  1917,  6940  tons;  in  1918,  3636  tons. 
Copal  is  also  an  export  of  Portuguese  Angola;  all  of  the 
copal  exported  from  Angola  is  sent  to  Portugal. 

The  United  States,  Great  Britain  and  Japan  are  com- 
peting for  trade  in  the  Belgian  Congo,  especially  in  the 
Province  of  Katanga.  This  province  appreciates  par- 
ticularly American  wearing  apparel  of  different  kinds  and 
this  far-off  market  probably  can  be  held  by  us  in  spite  of 
the  active  competition  of  rivals  who  have  the  advantage 
of  being  nearer  than  American  houses. 

Such  things  as  textiles,  enameled  goods,  tools,  watches 
and  locks  are  being  sent  to  the  district  of  Haut  Luapiila. 
Belgium  naturally  feels  that  it  should  have  a  larger  share 


AMERICAN  OVERSEAS  TRADE  WITU  AFRICA     347 

of  this  trade  than  it  has  been  getting  of  late.  Great  Britain 
supplies  cloth,  sheetings,  sugar,  candles,  tobacco  and 
cigarettes.  Japan  took  every  opportunity  during  the  war 
to  ship  those  things  which  Germany  had  formerly  sent  and 
now  supplies  such  merchandise  as  pencils,  pocket  and  table 
knives,  glassware,  combs,  mirrors,  perfumery,  matches  and 
considerable  quantities  of  colored  cotton  goods. 

In  this  colossal  country  comprising  almost  every  variety 
of  nationality  and  offering  extreme  diversity  of  climate, 
the  possibilities  of  the  soil  and  the  financial  development 
of  industries  along  a  hundred  lines,  furnish  the  arena  for 
world  trade  enterprises  equal  to  the  vision,  the  courage  and 
the  efficiency  of  merchant  traders  in  all  lands.  It  is  signifi- 
cant that  among  American  firms  becoming  interested  in- 
creasingly in  African  business  are  those  of  the  larger 
export  and  import  houses.  W.  R.  Grace  &  Co.  with  their 
London  offices  have  more  or  less  flourishing  offices  and  busi- 
ness activities  in  the  following  cities  and  towns  of  Africa: 
Alexandria,  Accra,  Freetown,  Nairobi,  Dakar,  Johannes- 
burg, Lagos-Nigeria,  Bathurst,  Bulama,  Conakry.  Among 
the  products  handled  in  these  various  sections  are:  cotton, 
cacao,  pahn  oil,  peanuts,  or  ground  nuts,  chrome  and 
manganese. 

We  would  recommend  that  all  manufacturers  or  traders 
wishing  to  enter  this  vast  open  door  of  trade  get  in  touch 
with  the  Bureau  of  Foreign  and  Domestic  Commerce  at 
Washington,  T).  C,  which  Bureau  can  supply  latest  infor- 
mation and  statistics  concerning  any  commodity.  We  would 
suggest  in  this,  as  in  all  cases  where  information  is  desired, 
that  questions  state  definitely  the  products  or  definite  line 
of  industry  about  which  information  is  desired,  in  order 
that  this  important  Bureau  may  know  exactly  what  infor- 
mation the  manufacturer  desires  to  obtain. 

In  the  great  trade  field  of  the  world,  Africa  is  to  take 
an  important  place,  being  still  a  largely  undeveloped,  and 
in  some  places  unexplored  region  that  our  trade  pioneers 
"will  go  up  to  occupy." 


CHAPTER  XXIII 
AMERICAN  COMMERCE  WITH  RUSSIA 

The  condition  of  Eussia  as  this  is  written  in  1921,  charac- 
terized by  great  uncertainty  as  to  promises  held  out  by  the 
Soviet  government  relative  to  trade,  with  little  or  no  surety 
of  protection  for  foreigners  or  foreign  goods  entering 
Russia,  and  with  doubtful  conditions  of  production  or 
methods  of  payment  on  the  part  of  the  inhabitants  of 
Russia,  makes  the  present  trade  situation  with  this  vast 
country  a  problematical  one.  The  United  States  govern- 
ment justly  has  refused  to  have  trade  dealings  with  a 
government  which  possesses  such  a  record  as  the  present 
Soviet  regime.  In  spite  of  rumors  that  certain  trade  with 
Russia  is  being  done  on  the  part  of  Great  Britain  and  other 
European  countries,  it  seems  fairly  safe  to  predict  that 
this  great  country  will  be  closed  to  world  trade  in  general 
until  other  nations  can  become  assured  of  a  worth  while 
government  and  a  steadiness  of  production  that  will  merit 
serious  attention. 

The  following  statement  of  Secretary  of  State  Hughes 
made  on  March  25,  1921,  in  relation  to  the  opening  of  trade 
between  the  United  States  and  Russia,  represents  the 
attitude  of  the  Government  and  of  the  leading  and  best 
informed  business  men: 

The  Government  of  the  United  States  views  with  deep  sympathy 
and  grave  concern  the  plight  of  the  people  of  Russia  and  desires 
to  aid  by  every  appropriate  means  in  promoting  proper  oppor- 
tunities through  which  commerce  can  be  established  upon  a  sound 
basis.  It  is  manifest  to  this  Government  that  in  existing  cir- 
cumstances there  is  no  assurance  for  the  development  of  trade, 
as  the  supplies  which  Russia  might  now  be  able  to  obtain  would 

348 


AMERICAN  COMMERCE  WITH  RUSSIA  349 

be  wholly  inadequate  to  meet  her  needs,  and  no  lasting  good  can 
result  so  long  as  the  present  causes  of  progressive  impoverish- 
ment continue  to  operate.  It  is  only  in  the  productivity  of  Russia 
that  there  is  any  hope  for  the  Russian  people,  and  it  is  idle  to 
expect  resumption  of  trade  until  the  economic  bases  of  produc- 
tion are  securely  established.  Production  is  conditioned  upon  the 
safety  of  life,  the  recognition  by  firm  guarantees  of  private  prop- 
erty, the  sanctity  of  contract  and  the  rights  of  free  labor. 

If  fundamental  changes  are  contemplated,  involving  due  regard 
for  the  protection  of  persons  and  property  and  the  establishment 
of  conditions  essential  to  the  maintenance  of  commerce,  this 
Government  will  be  glad  to  have  convincing  evidence  of  the  con- 
summation of  such  changes,  and  untU  this  evidence  is  supplied 
this  Government  is  unable  to  perceive  that  there  is  any  proper 
basis  for  considering  trade  relations. 

It  is  important,  however,  that  Russia  which  has  formed 
one  of  the  greatest  and  most  important  markets  of  the 
world  and  which  in  all  certainty  possesses  large  prospective 
opportunities  tor  trade,  when  she  puts  her  house  in  order, 
should  receive  the  careful  attention  of  American  business 
interests. 

Russia,  like  India,  for  the  American  has  been  shrouded 
more  or  less  in  mystery.  Although  nominally  included 
usually  in  Europe,  this  vast  inarticulate  land  teeming  with 
its  millions  of  peasantry,  its  soil  rich  in  every  possibility 
of  agriculture  and  mining,  partakes  largely  of  Asiatic  ideas 
and  traditions.  The  vast  distances,  moreover,  insufficient 
transportation,  together  with  the  geographical  fact  that 
Russia  is  not  easy  to  reach  by  Americans,  has  added  to  the 
impregnability  of  this  land  for  both  trade  and  travel. 

Added  to  these  fundamental  barriers  to  easy  relation- 
ships are  the  present  menace  of  Bolshevism  and  the 
terrific  devastation  and  demoralization  coming  in  the  train 
of  a  great  war.  It  would  seem  natural  that  the  evils  which 
this  social  and  political  Bolshevist  movement  has  foisted  on 
Russia — the  evils  of  disrupted  homes,  broken  transportation, 
demoralized  exchange  and  uncertain  and  unscrupulous  gov- 
ernment— should  discourage  nationals  of  other  parts  of  the 
world  from  engaging  enthusiastically  in  Russian  business. 


350       FOREIGN  TRADE  MARI^TS  AND  METHODS 

Previous  to  the  war  Germany  held  a  monopoly  of  the 
Russian  market.  Comparing  Russia's  trade  with  Germany 
and  with  Great  Britain  it  is  found  that  from  1870  through 
1913  Germany's  export  to  Russia  increased  from  39.5  per 
cent  to  52.6  per  cent.  Germany's  export  to  Russia  in  1913 
amounted  to  $332,622,000— $246,300,000  more  than  in  1870. 
In  the  meantime  England's  export  to  Russia  decreased 
from  31  per  cent  to  13.8  per  cent. 

The  same  is  true  of  Russia's  export  to  both  countries. 
During  these  43  years  Russia's  export  to  Germany  in- 
creased from  21.1  per  cent  to  31.8  per  cent.  At  the  end 
of  this  period  Russia's  export  to  Germany  had  increased 
$176,100,000.  During  the  same  time  Russia's  export  to 
England  dropped  from  47.2  per  cent  to  18.8  per  cent. 

According  to  the  statement  made  by  Mr.  A.  J.  Sack, 
Director  of  the  Russian  Information  Bureau  in  the  United 
States,  a  great  part  of  Germany's  success  in  Russia  was 
due  to  the  Russian-German  Commercial  Treaty  existing 
before  the  war.  This  treaty  favored  German  interests  to 
such  a  degree  that  before  the  war,  in  Russian  economic 
literature,  the  question  was  raised,  as  to  whether  Russia 
should  be  Germany 's  colony  any  longer  ?  But  the  Russian- 
German  Commercial  Treaty  was  only  one  of  the  conditions 
that  made  for  Germany's  success  in  dealing  with  Russia. 
The  immediate  reason  for  Germany's  success  was  her  won- 
derful method  in  trading. 

It  was  generally  considered  that  English  goods  imported 
into  Russia  were  better  in  quality  than  German  goods,  but 
the  English  made  the  mistake  of  not  considering  the  com- 
paratively low  buying  power  of  the  Russian  population. 
English  goods,  like  American  goods,  were  always  high 
priced  and  did  not  present  as  great  variety  and  novelty 
as  German  products. 

Another  difficulty  that  England  as  well  as  the  United 
States  has  experienced  in  competition  with  Germany,  lay 
along  the  line  of  credit.  The  English  contracts  with  Russian 
houses  were  closed  f.o.b.  English  port.  This  was  con- 
ti'ary  to  the  customs  of  the  Russian  market  where  the  credit 


AMERICAN  COMMERCE  WITH  RUSSIA  351 

system  was  used  largely  in  the  purchase  of  goods.  This 
demand  to  pay  for  goods  a  month  or  two  before  the 
goods  were  even  sent  was  fatal  to  English  trade  with 
Russia. 

The  Germans  were  most  generous  in  their  credits  and 
furthermore  the  German  salesmen  spoke  Russian  fluently 
and  presented  their  catalogs  printed  in  Russian,  marking 
their  goods  according  to  the  Russian  system  of  measuring 
with  prices  marked  in  rubles  and  kopeks. 

Even  during  the  war  Germany  kept  up  certain  con- 
nections with  Russia  through  neutral  European  countries, 
sometimes  by  masquerading  their  industrial  products  under 
French,  English,  Swedish  and  Japanese  names.  It  was, 
therefore,  to  be  expected  that  the  Allies  after  the  war  should 
expect  Germany  to  secure  as  soon  as  possible  her  old  pre- 
eminence in  trade  with  Russia,  and  shortly  after  the 
Armistice  it  was  reported  by  a  member  of  the  American 
Commission  in  Berlin  that  the  Germans  had  planned  to 
send  a  Commission  to  Russia  for  the  purpose  of  examining 
the  economic  conditions  of  that  country.  In  this  report 
it  was  stated  that  Germany  had  pledged  herself  to  recon- 
struct the  railroads  and  telegraphic  system  of  Russia,  as 
well  as  to  export  a  certain  amount  of  machinery  for  agricul- 
tural and  industrial  purposes.  However  true  this  report 
may  be  in  detail  there  is  no  doubt  of  the  fact  that  Germany 
is  especially  well  equipped  for  trade  with  Russia  for  three 
reasons:  Favorable  geographical  position;  low  rate  of 
exchange  prevailing  in  both  countries;  and  the  fact  that 
a  considerable  portion  of  German  industry,  particularly  the 
steel  and  iron  industries  which  have  been  exporting  to 
Russia  for  many  decades,  has  a  clear  knowledge  of  Russian 
needs. 

The  United  States  in  the  future,  however,  will  meet  not 
only  German  competition  but  must  cope  with  most  active 
energies  on  the  part  of  England,  France  and  Japan,  which 
countries  already  have  had  economic  connections  in  Siberia 
and  are  watchful  for  the  future  openings  of  trade  wherever 
the  demoralizing  Soviet  Government  gives  opportunity  for 


352       FOREIGN  TRADE  MARKETS  AND  METHODS 

entree.  Canada  has  studied  the  Siberian  markets,  and  pros- 
pects, and  Japanese  merchants  and  bankers  have  acquired 
leaseholds  on  industries,  forests  and  mines  in  Eastern 
Siberia. 

If  population,  soil,  mineral  deposits  and  business  gen- 
erally have  to  do  with  future  success  of  trade,  Russia  must 
be  considered  as  one  of  the  great  future  possibilities  for 
commerce  and  trade  development.  Russia's  economic 
progress  depends  upon  the  development  of  her  vast  natural 
resources  and  the  reestablishment  of  Russian  credit  in  for- 
eign markets,  with  the  repudiation  of  Bolshevism.  These, 
naturally,  are  the  first  essentials  toward  the  enlarging  of 
her  markets. 

The  Russian  Information  Bureau  in  the  United  States 
points  out  the  striking  development  even  under  the  bureau- 
cratic regime  during  the  ten  years  preceding  the  last  war. 
During  this  period  Russia's  national  wealth  had  almost 
doubled.  Before  the  Russo-Japanese  War  in  1901,  Russia 
produced  16,750,000  tons  of  coal.  Ten  years  later,  in  1911, 
Russia  yielded  31,116,667  tons  of  coal,  about  86  per  cent 
more  than  in  1901.  Just  before  the  World  War  Russia 
was  producing  more  than  40,000,000  tons  annually.  The 
amount  of  copper  smelted  in  Russia  in  1901  was  only  9633 
tons.  In  1911  this  amount  had  increased  to  26,060  tons. 
Just  prior  to  the  war  it  totaled  about  40,000  tons.  The 
progress  in  copper  production  is  analogous  with  the  develop- 
ment in  all  the  metallic  industries  in  Russia.  The  quantity 
of  pig  iron  produced  was  almost  doubled  in  three  years, 
reaching  more  than  5,000,000  tons  just  before  the  war. 

Agricultural  production  in  Russia  developed  along  the 
same  lines.  In  1901  an  area  of  214,500,000  acres  was  sowed 
in  main  agricultural  products,  whereas  in  1910-1911  the 
number  of  acres  planted  was  246,000,000.  The  yield  in 
1901  was  54,167,000  tons,  and  m  1910-1911  it  amounted  to 
74,168,000  tons. 

Naturally,  with  the  development  of  Russia's  industries, 
Russia 's  trade  also  developed.  The  number  of  Russian  com- 
mercial houses  increased  from  862,000  in  1901  to  1,177,000 


Copyright,  Publishers  Photo  Service,  N.  Y. 


SPINNING     WOOL     AND     WEAVING     CASHMERE     SHAWLS     AT     SYRINAG.AR, 
CASHMERE,    NORTH    INDIA. 


CopyriijM.  I  ndinrnnd  ,{•  I'nderwood.  N.  Y. 
RUSSIAN  CLOTH  MARKET  IN  "THE  FAIR"  OF  NIJNI  NOVGOROD,  RUSSIA. 


AMERICAN  COMMERCE  WITH  RUSSIA  353 

in  1911.  Just  preceding  the  war  the  number  of  commercial 
houses  totaled  about  1,500,000. 

The  joint  stock  company  is  a  very  important  feature  of 
Russia's  industrial  development.  Many  Eussian  manufac- 
turing establishments  are  organized  in  the  form  of  joint 
stock  companies.  During  the  five  years  1903-1907,  419 
joint  stock  companies  began  operating  in  Russia,  with  a 
capital  of  $180,540,000.  During  the  following  five  years, 
1907-1911,  778  joint  stock  companies  were  operating  with 
a  capital  of  $453,900,000.  Just  prior  to  the  war,  in  1913, 
235  new  joint  stock  companies  were  organized,  with  a 
capital  of  about  $204,000,000.  The  capital  of  the  joint 
stock  companies  increased  about  $500,000,000  since  1911, 
reaching  a  total  of  $2,022,150,000  before  the  war.  Of  this 
$299,370,000  was  foreign  capital. 

Simultaneously  with  the  striking  economic  and  commer- 
cial development  in  Russia,  the  financial  strength  of  the 
vast  country  greatly  increased.  The  money  in  Russian 
banks  and  in  circulation  multiplied  from  $918,000,000  to 
$1,938,000,000  during  the  ten  years  prior  to  the  war,  an 
increase  of  about  111  per  cent.  The  amount  of  securities  in 
circulation  grew  from  $4,233,000,000  to  $6,783,000,000,  an 
increase  of  about  60  per  cent.  The  deposits  in  the  Russian 
State  Bank,  Societies  for  Mutual  Credit,  commercial  banks 
and  city  banks  on  January  1,  1913,  amounted  to  $1,669,- 
230,000  about  $1,000,000,000  more  than  on  January  1,  1903. 
The  deposits  in  the  Russian  savings  banks  multiplied  from 
$399,840,000  in  1903  to  $812,840,000  in  1913.  During  the 
ten  years  between  the  Russo-Japanese  and  the  present  war 
Russia's  wealth  had  doubled. 

One  of  the  first  needs  of  Russia  is  the  development  of 
her  railroads.  Russia,  covering  one-seventh  the  total  area 
of  the  globe  and  being  about  three  times  the  size  of  the 
United  States,  possesses  only  about  40,000  miles  of  railroad. 
The  following  table  gives  a  comparison  of  the  pre-war 
railroad  situation  in  Russia,  not  only  with  that  of  the 
United  States  but  also  with  the  principal  countries  of 
Europe : 


354        FOREIGN  TRADE  MARKETS  AND  METHODS 


The  Length 
of  the  Rail- 
road System 
(in  miles) 


To  Each 

100  Square 

Miles 


For  Every 

10,000 
Population 


United  States . . . 

All  Europe 

France 

Germany 

Austria-Himgary 
Great  Britain , . . 

Italy 

Russia 


258,783 
225,898 
32,924 
40,766 
29,582 
25,053 
11,304 
39,706 


1.9 
1.5 
4.1 
5.0 
2.9 
5.3 
2.6 
0.5 


29.0 
5.0 
8.4 
6.2 
5.8 
5.6 
3.2 
3.2 


Russia  also  needs  coal  in  order  to  develop  her  mining  in 
the  Ural  Mountains,  as  there  is  practically  no  coal  in  these 
mountains.  This  coal  must  be  brought  from  Western  Siberia, 
and  the  problem  of  transportation  is  one  of  the  difficulties 
connected  with  the  industrial  development  of  the  country. 

The  development  of  Russia's  timber  industry  holds  a 
key  to  the  partial  solution  of  her  financial  difficulties,  since 
Siberia  contains  half  the  forests  of  Asia.  It  is  estimated 
that  in  the  Amur  region  and  in  the  Maritime  Province 
alone  there  are  509,000,000  acres  of  timber  land.  During 
the  nineteenth  century,  Russia's  timber  export  multiplied 
126  times  and  she  is  destined  to  take  a  leading  place  in 
the  world's  markets  in  this  commodity. 

Comparing  Russia  with  a  group  of  countries  which  are 
able  to  export  timber,  gives  the  following  results: 

The  Amount  of  Timber  Land  (in  Acres) 


Germany 

Balkan  States ..... 

France  (without  col- 
onies)   

Spain  (without  colo- 
nies)   

Italy  (without  colo- 
nies)   

Great  Britain  (with- 
out  colonies) .... 

Other  European 
countries 


38,430,000 
28,380,000 

27,141,000 

17,844,000 

11,256,000 

3,375,000 

6,426,000 


Russia 1,125,000,000 

Canada 889,380,000 

United  States 603,000,000 

Scandinavia 81,000,000 

Austria-Hungary.      63,000,000 


AiMERICAN  COMMERCE  WITH  RUSSIA 


355 


In  spite  of  Russia's  great  preserves  in  this  line  she  has 
been  behind  other  nations  in  the  amount  of  foreign  trade 
in  timber  as  the  following  statistics  of  the  export  of  timber 
in  1913  from  Russia  show : 


The  Amount  of 

Timber  Land 

(in  Acres) 

The  Export  of 

Timber 

(in  Dollars) 

Russia 

1,125,000,000 

603,000,000 

81,000,000 

63,000,000 

89,250,000 
134,487,000 
129,489,000 

79,203,000 

United  States 

Sweden  and  Norway 

Austria-Hungary 

In  a  great  agricultural  country  like  Russia  containing 
potential  wealth  and  population  far  greater  than  that  of 
our  original  American  colonies,  no  government  conditions 
can  be  lastingly  a  menace  to  her  prosperity ;  no  government, 
however  bad,  can  destroy  the  fertility  of  her  soil  or  the 
wealth  locked  up  in  her  mines,  or  her  forests.  In  these 
three  great  resources  alone  Russia  will  one  day  rise  in  a 
gigantic  strength. 

Russia  is  Europe's  granary  and  Central  Europe 
obtained  before  the  war  one-third  of  her  staple  food  require- 
ments in  Russia.  In  the  year  1913  Russia  produced  one- 
third  of  the  world's  wheat,  one-half  of  the  barley  and  90 
per  cent  of  the  flax.  The  country  holds  a  balance  of  eco- 
nomic power  in  Europe  and  the  safety  of  Europe,  as  well 
as  the  stability  of  world  economic  conditions  depends  more 
largely  upon  this  country  than  we  sometimes  suppose.  The 
world's  body  cannot  grow  continuously  strong  and  healthy 
with  a  diseased  member,  especially  when  that  member  is 
so  enormous  as  Russia. 

Bolshevism  which  has  out-czared  the  Czar  must  come  to 
an  end  or  be  radically  reformed  before  the  world  will  again 
establish  its  real  equilibrium.  The  whole  earth  needs 
Russian  furs,  meats,  hides,  her  coal,  lier  iron,  her  manganese, 
her  copper,  her  timber  and  her  agricultural  products,  and 


356        FOREIGN  TRADE  MARKETS  AND  METHODS 

one  naturally  asks — ^How  can  this  most  speedily  be  brought 
about  ? 

Already  some  progress  has  been  made  through  the  use 
of  the  Eussian  cooperative  societies  and  in  Siberia  a  system 
akin  to  barter,  especially  in  the  trading  of  furs,  has  been 
carried  on.  The  commercial  accounts  of  Russia  were  usually 
all  right  before  the  war  and  there  is  no  reason  to  distrust 
Russian  business  men  along  this  line  as  soon  as  present 
political  upheavals  have  subsided. 

One  of  our  reasons  for  failure  in  Russia  according  to  Mr. 
Frederick  M.  Corse,  Vice  President  New  York  Life  Insur- 
ance Company,  has  been  our  initial  error  in  sending  in- 
ferior men  to  represent  us. 

Since  1902  I  have  witnessed  scores  of  failures.  Many  repre- 
sentatives of  American  business  houses  have  gone  there,  men  of 
untried  character,  who  suffered  a  moral  collapse  inside  of  a  year. 
An  equally  unfortunate  class"  of  men  came,  loud  and  blustering 
men  who  failed  because  they  had  no  experience  in  handling  deli- 
cate situations  where  tact  and  patience  were  necessary,  men  who 
could  not  respect  and  honor  customs  and  formalities  alien  to  our 
own.  During  the  last  five  years  a  marked  improvement  has  been 
noticeable.  Younger  men  were  sent  under  careful  supervision, 
enforced  to  learn  the  language  and  customs  of  the  country  before 
assuming  heavy  responsibilities.  Only  in  this  slow  and  con- 
servative way  can  permanent  and  profitable  commei'ce  between 
America  and  Russia  be  built  np. 

As  far  as  labor  is  concerned,  in  Russia  it  is  a  simple 
problem  as  compared  with  labor  in  certain  other  parts  of 
the  world.  Labor  costs  per  unit  of  product  in  Russia  are 
below  those  in  the  United  States.  Usually,  even  in  the  use 
of  labor  a  certain  knowledge  and  adjustment  to  the 
country's  conditions  are  required  if  Americans  are  to 
succeed. 

Social  etiquette  must  be  studied  as  in  other  foreign  lands 
and  the  regular  customs  concerning  handshaking,  going 
without  breakfast,  and  tea  drinking,  need  to  be  observed. 
As  in  Japan,  a  business  call  is  a  social  event. 


AMERICAN  COMMERCE  WITH  RUSSIA  357 

Mr.  Norton,  Acting  Director,  Russian  Division  United 
States  Committee  on  Public  Information,  has  given  some 
valuable  suggestions  for  our  business  leaders  who  are 
choosing  men  and  training  them  to  send  to  Russia  when 
the  new  day  of  trade  dawns: 

Your  agent  should  be  sent  to  Vladivostok  or  Harbin  at  once. 
He  should  be  a  young  man,  and  he  certainly  should  be  an  Ameri- 
can. Far  too  long  have  we  permitted  foreign  'nationals'  to  repre- 
sent us  in  world  trade.  Our  Russian  business  has  been  in  the 
hands  of  Germans  and  Swedes.  This  policy  is  particularly 
dangerous  in  the  Far  East  where  all  business  is  based  on  personal 
friendship,  where  your  customers  are  not  your  friends,  but  your 
agent's  friends,  and  therefore  his  customers.  Should  he  leave 
you  at  any  time,  your  customers  will  go  with  him.  If  he  owes 
allegiances  to  any  other  nation,  sooner  or  later  he  will  deliver 
your  business  to  his  own  country.  It  is  surprising  to  note  how 
many  American  agencies  in  the  Far  East  are  in  the  hands  of 
representatives  from  other  countries. 

Living  conditions  are  difficult  in  Siberia  at  this  time,  and 
young  men  will  bear  them  with  greater  cheerfulness  than  could 
an  older  man.  Expensive  outfits  are  not  required  in  preparing 
for  a  winter  in  Siberia.  Any  man  in  ordinary  American  clothing 
is  sufficiently  warmly  clad  to  live  in  Siberia  in  the  dead  of  winter, 
provided  only  that  he  have  a  fur,  a  warm  top  coat,  cap,  gloves, 
blankets,  linen,  cigarettes,  and  such  personal  necessities  of  life 
as  he  would  use  here,  remembering  only  that  he  will  buy  nothing 
other  than  food  in  Siberia.  He  should  take  some  knives  and 
fountain  pens  to  be  used  as  gifts,  and  he  should  have  warmer 
underclothing  than  B.V.D.'s.  Last  winter  one  of  our  young  men 
wintered  in  Omsk  with  only  such  garments  in  his  wardrobe,  and 
he  is  still  gunning  for  his  advisor. 

A  young  man  should  be  sent  because  he  will  be  more  tolerant 
of  foreign  customs,  and  why  should  not  the  Americans  be  tol- 
erant? In  the  eyes  of  the  Far  East,  we  are  a  young  nation. 
Our  older  neighbors  generously  give  us  credit  for  many  improved 
customs,  but  why  should  we  be  intolerant  of  the  well  tried  customs 
of  other  nations,  esj^eeially  when  we  are  so  young  in  trading 
with  the  world  that  we  do  not  have  the  slightest  conception  of 
the  reasons  why  certain  things  are  done  in  certain  ways?  We 
laugh  at  the  Russian's  'tea-drinking'  during  the  day.     We  are 


358        FOREIGN  TRADE  MARKETS  AND  METHODS 

/ 
amused  that  the  Samovar  is  kept  hot  for  the  manager  and  clerks. 
The  reason  for  this  custom — like  the  answer  to  all  customs — is 
simple.    The  water  in  Russia  is  unfit  for  use  until  boiled;  boiled 
water  without  tea  or  other  flavoring  is  fiat. 

But  our  young  friend  will  find  that  the  same  spirit  which  made 
him  successful  here  will  make  him  successful  over  there,  despite 
the  bewildering  maze  of  odd  conditions,  provided  he  adds  to  his 
Americanism  a  certain  degree  of  reserve  and  patience,  and  still 
more  patience,  not  forgetting  entirely  that  American  energy,  per- 
sistence and  resourcefulness,  are  of  great  value  to  him  wherever 
he  is.  The  American  that  goes  to  Siberia  will  find  that  a  little 
more  attention  to  formal  etiquette  and  tactfulness  will  pay  big 
dividends.  In  other  words,  he  should  make  himself  a  more  perfect 
American,  rather  than  forget  that  he  is  an  American.  He  should 
not  try  to  become  a  Russian,  or  a  Japanese,  or  a  Chinese. 

As  to  when  Russia  will  again  be  opened  for  successful 
and  satisfactory  world  trade,  it  is  difficult  to  predict  at 
this  writing.  It  would  seem  impossible,  however,  for  the 
present  regime  to  continue  in  Russia  for  any  great  length 
of  time  since  the  country  must  produce,  must  establish 
and  complete  its  transportation  facilities  and  make  provi- 
sion for  the  safety  of  life  and  property,  if  the  nation  is 
to  go  on  and  take  its  part  in  world  trade  relationships. 
When  this  new  and  brighter  day  dawns  for  Russia,  it 
would  seem  reasonable  that  Americans  who  have  given 
thought  and  preparation  to  the  possible  trade  routes  to 
Russian  markets,  and  to  a  study  of  the  Russian  language, 
would  be  able  to  secure  their  share  of  business  in  this  vast 
territory,  certain  to  become  through  the  richness  of  its 
potential  resources  one  of  the  great  producing,  exporting 
and  importing  countries  of  the  world. 


CHAPTER  XXIV 

MARKETS  WITH  THE  UNITED  KINGDOM, 
CANADA  AND  AUSTRALIA 

The  United  Kingdom  of  Great  Britain  and  Ireland  may 
be  called  "tlie  mother  of  foreign  commerce." 

Even  before  the  rapid  rise  of  American  industrial 
activity  in  the  latter  part  of  the  nineteenth  century,  when 
none  of  Britain's  present  competitors  for  world  commerce 
had  become  formidable,  the  United  Kingdom  was  firmly 
established  in  a  trade  that  reached  virtually  every  corner 
of  the  earth. 

By  her  merchant  marine,  by  her  policy  of  vast  invest- 
ments abroad  which  brought  her  reciprocal  trade,  by  her 
free  trade  policy,  as  well  as  by  her  great  manufacturing 
genius  and  her  colonizing  capacity,  Great  Britain  had 
gained  a  material  empire  upon  which  the  sun  never  set. 
"When  you  thought  of  foreign  trade  for  any  comitry  before 
the  "World  War,  it  was  England  which  first  came  into 
thought.  In  1913  she  possessed  one-sixth  of  the  entire 
trade  of  the  world,  a  commerce  amounting  to  over  $6,800,- 
000,000,  a  trade  at  least  $2,000,000,000  in  advance  of  Ger- 
many, who  was  then  her  nearest  rival. 

When  the  European  war  broke  out  in  1914,  England 
possessed  practically  one-half  of  the  ocean  tonnage  of  the 
world,  as  well  as  being  the  leading  shipbuilding  nation  and 
underwriting  two-thirds  of  the  marine  insurance  on  the 
world's  output  of  ships.  Although  she  ranked  second  to 
the  United  States  in  the  manufacturing  industry,  her  in- 
vestments of  capital  in  foreign  enterprises  were  the  largest 
of  any  nation,  while  she  was  the  confessed  leader  of  the 
world  in  banking  and  finance. 

In  all  this  development,  England's  coal  supply,  which 

359 


360        FOREIGN  TRADE  MARKETS  AND  METHODS 

was  one-fourth,  of  the  entire  coal  production  of  the  world, 
gave  her  great  assistance,  not  only  in  her  own  manufactur- 
ing, but  in  the  fact  that  she  could  readily  supply  return 
cargoes  for  her  ships  to  nonproducing  coal  countries. 

Among  the  reasons  which  gave  Great  Britain  her  great 
prestige  in  commercial  trading  was  the  fact  that  her  trad- 
ing pioneers,  no  matter  where  they  were  found,  always  had 
the  assurance  that  their  rights  and  their  property  would 
be  safeguarded  by  the  diplomatic,  the  military  and  the 
naval  power  of  Great  Britain,  a  confidence,  by  the  way, 
which  has  not  always  been  present  among  American  busi- 
ness men  who  have  gone  forth  to  invest  capital  and  labor 
in  building  up  foreign  business. 

A  natural  love  for  the  sea  and  for  adventurous  exploits 
was  another  reason  for  England's  foreign  trade  success, 
while  the  geographical  position  of  the  British  Isles  made 
it  essential  for  her  to  look  beyond  her  own  borders  for 
expansion.  There  has  always  been  notable  among  the 
British  a  farsighted  and  settled  policy  in  connection  with 
their  foreign  business.  One  feels  in  India,  for  example, 
that  viceroys  and  governors  may  come  and  go,  but  in  the 
background  there  is  always,  not  only  the  English  Consti- 
tution but  a  trade  policy,  a  policy  that  is  not  at  the  mercy 
of  frequently  changing  parliaments  and  which  has  been 
worked  out  through  years  of  successful  commercial  efforts. 

England  has  also  cultivated  the  habit  of  placing  her 
trade  routes,  trading  and  coaling  stations,  at  strategic 
points  in  the  world,  and  she  has  also  made  her  country  a 
distributing  center  for  the  products  of  other  nations.  She 
became,  naturally,  a  great  world  market  and  London  was 
looked  upon  for  several  centuries  as  both  the  commercial 
and  also  the  financial  center  of  the  entire  world. 

It  is  only  through  the  exigencies  of  the  war  that  the 
United  States  has  usurped  something,  particularly  of  the 
financial  prestige,  of  the  United  Kingdom,  but  the  trade 
relations  between  these  two  English  speaking  countries  are 
among  the  most  important  factors  in  the  entire  circle  of 
overseas  commerce. 


MARKETS  WITH  THE  UNITED  KINGDOM         361 

A  study  of  markets  relating  to  Great  Britain  and  the 
United  States  and  a  knowledge  of  the  important  exports 
and  imports  between  the  two  nations  are  important  factors 
for  the  American  trader  to  know  if  he  expects  to  build  up 
a  permanent  commerce  in  any  particular  line  with  British- 
ers. It  is  important  to  loiow  that  our  trade  with  the  United 
Kingdom  (England,  Scotland  and  Ireland),  during  the 
year  1920  amounted  to  tlie  vast  sum  of  $3,320,434,238  (con- 
version based  on  normal  rate  of  4.8665  dollars  to  the  pound 
sterling),  and  that  the  leading  articles  in  this  commerce 
were: 

Exports  froji  the  United  States 

Cotton $803,562,828 

Wheat 339,707,142 

Bacon   143,337,375 

Tobacco    135,716,830 

Flour    52,909,853 

Lard    50,430,254 

Hides  and  Leather 41,365,708 

Barley 36,653,708 

Sugar    31,062,368 

Copper  19,466,000 

Iron  and  Steel 14,599,500 

Imports  into  United  States 

Cotton  piece  goods $38,932,000 

Rubber   30,600,000 

Linen  piece  goods  29,834,297 

Woolen  and  worsted  yarns  and  mfgs.  (except 

wearing  apparel)    29,199,000 

Cotton  yarns 26,489,471 

Precious  stones 22,500,000 

Jute  piece  goods,  bags,  etc 19,466,000 

Furs    18,800,000 

Pig  iron  11,053,836 

Hides  and  skms 9,733,000 

Leather  7,305,983 

Tin    5,581,817 


362       FOREIGN  TRADE  MARKETS  AND  METHODS 

The  total  trade  was  made  up  of  $2,746,340,353  exported 
from  the  United  States  to  Great  Britain  and  $574,093,885 
exported  from  Great  Britain  to  the  United  States,  or 
approximately  a  ratio  of  exports  to  imports  of  4  to  1  in 
favor  of  the  United  States.  However,  imports  from  Great 
Britain  in  1919  were  only  $375,866,513,  showing  that  Great 
Britain  increased  her  exports  to  us  in  the  space  of  one  year 
by  $198,277,372.  Exports  of  gold  bullion  and  coin  by  the 
United  Kingdom  for  1920  amounted  to  £92,565,137  ($450,- 
468,239.21)  of  which  £80,621,469  ($392,344,378.89)  was  in 
refined  bullion  bars  and  the  balance  in  coin.  Of  this  £80,- 
621,469  of  gold  bars,  £52,828,093  ($267,087,914.58)  was 
exported  to  the  United  States. 

It  is  important  also  to  have  somewhat  precise  knowledge 
as  to  the  tendency  of  British  trade  in  South  America  where 
for  many  years  Englishmen  and  Scotchmen  particularly 
have  devoted  much  attention  to  the  development  of  British 
markets.  In  1920  British  trade  with  South  America 
amounted  to  £79,872,574  ($386,699,882.37)  of  which  £52,- 
139,433  ($253,736,550.69)  were  exports  and  £27,733,141 
($134,963,430.68)  were  imports,  while  the  trade  of  the 
United  States  with  the  same  section  during  the  same  period 
was  $1,384,964,034  of  which  $623,910,163  were  exports  and 
$761,053,871  were  imports. 

The  manufactures  of  England  which  have  been  par- 
ticularly notable  in  world  trade  have  been  textiles,  espe- 
cially those  of  cotton,  together  with  machinery  used  in  the 
textile  industry,  and  leather  manufactures,  shipbuilding 
and  the  production  of  locomotives,  iron  and  steel  rails, 
pottery  and  cutlery. 

It  is  interesting  to  note  that  the  value  of  English  manu- 
factures exported  in  1912  amounted  to  $2,000,000,000,  while 
that  of  all  other  nations  amounted  to  $6,000,000,000.  In  1913 
it  is  estimated  by  a  prominent  British  statistician  that  the 
investments  of  Englishmen  in  overseas  property  aggi'egated 
£3,715,000,000  or  about  $18,000,000,000,  and  that  her  invest- 
ments in  the  United  States  were  estimated  at  £755,000,000, 
and  investments  in  Latin  America  aggregated  £724,000,000. 


MARKETS  WITH  THE  UNITED  KINGDOM        363 

It  is  this  practical  farsightedness  of  Great  Britain  which 
has  helped  to  establish  her  so  firmly  in  virtually  every  part 
of  the  world. 

Professor  William  Clarence  Webster  is  quoted  as  follows 
relative  to  this  subject  by  Messrs.  L.  C.  Ford  and  Thomas 
F.  Ford  in  their  excellent  treatise  on  The  Foreign  Trade 
of  the  United  States: 


While  England  has  been  losing  her  position  as  the  world's 
workshop,  she  has  been  building  up  her  capitalistic  supremacy. 
Her  capital  has  flowed  into  her  colonies  and  nearly  every  country 
in  the  world.  Consequently  she  has  become  the  world's  creditor, 
and  wields  the  power  that  accompanies  capitalistic  supremacy. 
Her  capitalists  own  vast  tracts  of  land  and  work  farms  in  nearly 
every  country  of  the  world;  they  also  control  railroads,  manu- 
facturing plants,  and  mines  in  many  of  the  most  strategic  places 
on  every  continent.  In  this  way  England  keeps  her  cows  in 
Australia,  Canada,  and  Argentina;  cultivates  her  vrheat  in  Mani- 
toba, the  United  States,  and  India ;  grows  her  cotton  in  the  United 
States,  India,  and  Egypt;  spins  it  not  only  at  home,  but  even  in 
India,  China,  Egypt,  and  Mexico;  makes  her  machinery  in  Ger- 
many and  the  United  States,  Thus  not  only  her  many  colonies, 
but  the  whole  world  has  become  a  part  of  her  domain  through 
the  power  of  her  capital. 


No  one  can  travel  in  Argentina,  for  example,  where  such 
enormous  British  investments  are  everywhere  evident,  espe- 
cially in  Argentina  railways,  without  appreciating  how 
strategic  it  is  for  nations  to  show  their  belief  in  foreign 
commerce  by  investing  their  money  in  the  projects  intended 
to  develop  the  foreign  countries. 

In  general,  it  may  be  said,  that  the  United  Kingdom 
of  Great  Britain  imports  foodstuffs,  raw  materials  for  her 
factories,  and  certain  manufactured  silks,  leather,  woolen, 
hardware  utensils  and  machinery. 

Among  the  foodstuffs  are  dairy  products,  tropical  fruits, 
tea,  coffee,  sugar  and  cocoa,  while  the  raw  materials  in- 
clude cotton,  wool,  hides,  iron  ore,  skins  and  lumber.    Her 


364        FOREIGN  TRADE  MARKETS  AND  METHODS 

exports  for  the  most  part  are  included  in  such  large  items, 
as  manufactures  of  iron  and  steel,  coal,  woolens,  cotton  and 
chemicals. 

Great  Britain  has  become  past  master  in  trade  procedure 
relative  to  credits,  open  accounts,  packing,  financing  and 
shipping  her  goods,  and  behind  all  this  methodic  equipment 
and  experience  she  has  placed  a  rare  business  integrity  and 
gradually  built  up  her  foreign  markets  upon  an  unusual 
aptitude  for  international  trading. 

"Whether  in  the  immediate  years  the  United  Kingdom  will 
be  able  to  make  any  such  huge  investments  in  foreign  enter- 
prises as  has  been  her  custom  in  the  past  may  be  doubted. 
Nevertheless,  it  may  be  taken  for  granted  that  in  such 
sections  as  Latin  America,  South  Africa,  China  and  India, 
the  firm  basis  of  trade  and  finance  built  up  for  generations 
by  English  industry  and  English  capital  will  stand  firm, 
and  wherever  overseas  commerce  exists  it  can  be  taken  for 
granted  that  the  United  Kingdom  of  Great  Britain  will  be 
found  taking  her  legitimate  share  of  responsibility  in 
developing  new  countries  and  at  the  same  time  enlarging 
the  circle  of  her  commercial  influence. 

Canadian  and  Australian  Markets. — As  a  market  for 
American  goods  Canada  stands  a  good  third,  trade  between 
Canada  and  the  United  States  being  exceeded  only  by  the 
United  Kingdom  (British  Isles)  and  by  Latin  America 
(South  and  Central  America).  With  her  9,000,000  people, 
with  her  natural  wealth  of  $17,000,000,000,  our  neighbor 
to  the  North  has  become  naturally  closely  united  to  us  in 
the  bonds  of  commerce?. 

In  her  broad  Western  areas  particularly,  Canada  has  had 
similar  problems  and  similar  successes  to  our  own  in  agricul- 
ture, lumbering  and  the  general  development  of  her  new 
continent. 

More  truly  perhaps  than  any  section  of  her  mother 
country,  the  Canadian  people  understand  Americans  and 
the  3000  miles  of  unguarded  boundary  between  the  two 
countries  is  an  imaginary  line. 

Canada's  assets  include  chiefly  her  agricultural  resources, 


MARKETS  WITH  THE  UNITED  KINGDOM         365 

her  forests,  her  fisheries  and  her  mines.  Our  dependence 
upon  Canadian  wood  pulp  from  which  paper  is  manufac- 
tured was  brought  clearly  to  the  attention  of  American 
people  during  and  after  the  war,  and  Canada's  broad 
western  fields  of  wheat,  barley  and  oats  rival  any 
other  parts  of  the  world  in  the  cultivation  of  such 
products. 

British  Columbia  has  an  estimated  forest  area  of 
50,000,000  acres  and  produces  all  merchantable  woods  and 
pulp  woods.  Quebec,  with  100,000,000  acres  of  forest, 
has  the  largest  timber  area  in  Canada,  and  is  the  largest 
producer  of  pulp  wood.  Alberta  has  11,800,000  acres  of 
forests  producing  spruce,  pine,  cotton-wood  and  poplar. 
Manitoba  has  about  10,000  square  miles,  producing  prin- 
cipally spruce.  Nova  Scotia  produces  spruce,  fir,  hemlock, 
pine,  oak,  maple  and  birch  on  about  8000  square  miles. 
Ontario,  with  70,000,000  acres  of  forest  area,  produces 
spruce,  pine  and  poplar.  The  Yukon  has  large  tracts  of 
both  white  and  black  spruce,  balsam,  poplar  and  birch.  The 
forest  area  of  Prince  Edward  Island  is  about  316,000 
acres. 

According  to  the  report  of  Consul  Felis  S.  S.  Johnson 
of  Kingston,  Ontario,  on  June  26,  1921,  Canada's  imports 
of  merchandise  for  the  fiscal  year  ended  March  21,  1921, 
had  an  aggregate  value  of  $1,240,158,882,  this  total  com- 
paring with  $1,064,528,123  in  the  previous  year,  $919,711,- 
705  in  1919,  and  $619,193,998  in  the  pre-war  year  of  1914. 
Exports  of  domestic  merchandise  from  the  Dominion 
amounted  to  $1,189,163,701,  as  compared  with  $1,239,492,- 
098  in  1920,  $1,216,443,806  in  1919,  and  $431,588,439  in 
1914.  The  trade  balance  for  each  of  these  years  is  shown 
in  the  table  on  page  366. 

This  calculation  takes  no  account  of  the  reexports,  which 
amounted  to  $23,848,785  in  the  fiscal  year  1914,  $52,321,479 
in  1919,  $47,166,611  in  1920  and  $21,264,418  in  1921.  The 
inclusion  of  these  sums  changes  the  trade  position  as  fol- 
lows: 1914,  $163,756,774;  1919,  $349,053,580;  1920,  $222,- 
130,586;  1921,  $29,730,763. 


366        FOREIGN  TRADE  MARIiETS  AND  METHODS 


Classification 

1914 

1919 

Imports 

$619,193,998 
431,588,439 

$919,711,705 
1,216,443,806 

Exports 

Excess  of  imports  (+)  or  ex- 
ports (  — ) 

+  187,605,559 

-296,732,101 

Classification 

1920 

1921 

Imports 

$1,064,528,123 
1,239,492,098 

$1,240,158,882 
1,189,163,701 

Exports 

Excess  of  imports  (+)  or  ex- 
Dorts  (  — ) 

-174,963,975 

+50,995,181 

Imports  from  the  British  Empire  for  1921  aggregated 
$265,911,222,  contrasted  with  $174,351,659  for  the  preced- 
ing year;  for  the  same  periods  imports  from  continental 
United  States  (exclusive  of  Alaska)  amounted  to  $856,- 
613,430  and  $801,097,348.  On  the  other  hand,  exports  to 
the  British  Empire  declined  from  $561,788,003  in  1920  to 
$403,470,602  in  1921,  while  exports  to  the  United  States 
increased  from  $464,028,183  to  $542,304,456.  The  major 
divisions  of  Canada's  import  and  export  trade  for  the  fiscal 
year  ending  March,  1921,  compare  with  1920,  1919  and 
the  pre-war  of  1914  as  indicated  in  the  table  on  page  367. 

Among  foreign  countries  Cuba,  France,  Switzerland, 
Japan  and  San  Domingo  followed  the  United  States  in  rank 
as  suppliers  of  the  Canadian  market ;  and,  next  to  the 
United  States,  Italy,  Belgium,  France,  Greece  and  the 
Netherlands  were  the  Dominion's  best  "foreign"  customers 
last  year. 

Australian  Markets. — Another  of  the  British  dominions 
requiring  the  attention  of  American  exporters  and  manu- 
facturers is  the  commonwealth  of  Australia  with  its  vast 
total  area  of  2,946,691  square  miles,  a  rich  and  growing 
land  of  opportunity,  in  some  respects  similar  to  Canada  in 


MARKETS  WITH  THE  UNITED  KINGDOM 


367 


Classification 

1914 

1919 

Imports 

British  Empire 

United  States 

$154,526,846 

396,302,138 

68,365,014 

$    123,671,540 
750,203,024 

Other  countries 

45,837,141 

Total  imports 

$619,193,998 

$   919,711,705 

Exports 
British  Empire 

$238,642,517 

163,372,825 

29,573,097 

$   605,159,789 

United  States 

454,873,170 

Other  countries 

156,410,847 

Total  exports 

$431,588,439 

$1,216,443,806 

Classification 

1920 

1921 

Imports 
British  Empire 

$   174,351,659 

801,097,318 

89,079,146 

$   265,911,222 

United  States 

856,613.430 

Other  countries 

117,634,230 

Total  imports 

$1,064,528,123 

$1,240,158,882 

Exports 
British  Empire 

$   561,788,003 
464,028,183 
213,675,912 

$   403,470,602 

United  States 

542,304,456 

Other  countries 

243,388,643 

Total  exports 

$1,239,492,098 

$1,189,163,701 

progressiveness  and  also  sympathetically  related  in  the 
character  of  the  people  to  the  inhabitants  of  the  United 
States. 

Here  is  a  great  sheep  and  cattle  land  producing  minerals 
of  gold,  coal,  silver,  copper  and  iron  in  large  quantities, 
and  also  a  manufacturing  country,  particularly  in  the  states 
of  New  South  Wales  and  Victoria. 

In  this  fertile  continent  of  new  wealth,  sheep-raising  has 
comprised  one  of  the  most  important  of  the  pastoral  indus- 
tries, and  wool  has  been  the  most  important  single  article 


368       FOREIGN  TRADE  MARI^TS  AND  METHODS 

of  exchange.  The  cattle  and  horse-breeding  industries  have 
also  been  vital  in  Australian  commerce. 

Another  industry  of  great  importance  is  that  of  the  grow- 
ing of  wheat,  corn  and  the  cultivation  of  such  products  as 
hay,  potatoes,  sugar  cane  and  fruit. 

Australia  is  one  of  the  greatest  gold-producing  countries 
in  the  world  and  silver  is  also  mined  extensively.  There 
are  also  iron  and  coal  mines,  and  mineral  products'  such  as 
manganese,  bismuth,  lead,  mercury,  wolfram,  nickel  and 
zinc  are  found. 

The  United  States  in  a  recent  year  supplied  about  25 
per  cent  of  the  total  imports  of  Australia  and  purchased 
approximately  15  per  cent  of  the  total  exports. 

This  country,  carrying  on  a  foreign  trade  aggregating 
considerably  above  the  half  billion  mark  is  certain  to  be 
more  and  more  closely  associated  with  American  markets 
and  with  the  advantages  of  the  new  American  shipping 
routes,  identical  language  and  the  general  similarity  of 
problems,  the  cordial  trade  relations  between  the  United 
States  and  this  great  commonwealth  should  be  steadily 
developed. 


CHAPTER  XXV 

UNDERSTANDING  BRITISHERS— A  NECESSITY  FOR 
SUCCESSFUL  INTERTRADE  RELATIONS 

A  foreign  country  is  a  point  of  comparison  wherefrom  to  judge 
our  own. — Emerson. 

Quite  as  important  as  the  knowledge  of  markets,  and  a 
subject  which  is  far  less  frequently  considered,  is  a  thor- 
ough-going knowledge  of  English  traits  and  the  ability  to 
compare  American  and  English  characteristics  of  doing 
business.  This  knowledge  is  fundamental  and  elemental  to 
successful  business  dealing.  We,  therefore,  wish  to  present 
a  study  of  these  contrasting  traits  and  to  add  that  the 
manufacturer  or  merchant  who  has  been  able  to  grasp  the 
outstanding  characteristics  of  the  British  character  and 
adapt  himself  to  them  has  progressed  a  considerable 
distance  beyond  any  competitor  who  endeavors  to  do 
business  with  Britishers  without  this  rudimentary  knowl- 
edge. 

It  was  about  thirty  years  ago  that  Matthew  Arnold,  after 
his  visit  to  America,  wrote  in  the  Nineteenth  Century,  say- 
ing that,  as  he  viewed  them,  our  dangers  as  a  nation  are 
"self-glorification  and  self-deception."  These  traits  he 
attributes  to  "the  predominance  of  the  common  and  ignoble, 
bom  of  the  predominance  of  the  average  man. ' '  The  search 
of  the  English  critic  for  the  "sense  of  elevation"  was 
unsatisfactory,  and  reveals  among  other  things  the  difficulty 
of  the  foreigner  to  get  at  the  real  America. 

Lord  Haldanegave  utterance  before  the  World  War  to  the 
thought  that  the  great  danger  threatening  a  rupture  in  the 

369 


370       FOREIGN  TRADE  MARKETS  AND  METHODS 

relations  between  Germany  and  the  United  Kingdom  lay 
in  the  fact  that  owing  somewhat  to  a  common  origin  each 
nation  imagined  that  it  understood  tlie  other.  The  lamen- 
table blunders  shown  before  the  eyes  of  the  world  in  the 
World  War  in  the  mistaking  of  motives  and  ideals  of  peoples 
closely  united  by  the  ties  of  blood  and  marriage,  and  even 
with  adjoining  territories,  lead  to  the  conviction  that  there 
is  something  inalienable  and  racially  inherent  in  the  warji 
and  woof  of  every  people,  which  in  a  sense  is  not  trans- 
latable, especially  to  a  foreigner ;  something  which  even  the 
native  who  feels  it  intuitively  finds  it  most  difficult  to 
express. 

In  spite  of  the  cementing  ties  between  the  English  and 
the  American,  and  notwithstanding  the  usual  talk  of 
"motherland,"  these  two  countries  are,  in  the  realm  of 
national  characteristics  and  ideals,  worlds  apart.  While 
one  senses  certain  truth  in  the  criticism  of  a  great  English 
critic  like  Arnold,  even  though  that  criticism  is  more  than 
a  quarter  of  a  century  old,  there  is  yet  a  feeling  that  the 
real  spirit  of  America  has  escaped  him.  Americans  have 
been  well  supplied  with  books  written  by  our  cousins  across 
the  seas,  and  have  seen  themselves  as  the  Britisher  sees 
them  in  almost  every  type  of  interpretation,  ranging  all  the 
way  from  Thackeray  and  Dickens  to  H.  G.  Wells  and 
Arnold  Bennett.  Yet  there  is  always,  even  in  the  most 
tolerant  advice-loving  Yankee  mind,  the  suspicion  that 
Americans  are  Americans  by  reason  of  the  innate  might  of 
a  few  distinctive  principles  germane  to  the  nature  of  things 
in  the  United  States,  and  rooted,  as  one  might  say,  in  the 
subsoil  of  this  Western  land — principles  which  are  loath  to 
give  their  color  to  a  transient  stranger. 

Still  it  is  with  England  that  our  business  interests  and 
spiritual  ideals  are  more  nearly  identical  than  with  any 
other  nation,  and  it  is  to  England  that  our  admiration  and 
respect  have  gone  forth  in  a  multitude  of  ways,  even  when 
we  have  been  unconscious  of  it,  or  perhaps  rather  too  proud 
to  admit  it.  Since,  furthermore,  we  were  all  Englishmen  in 
the  beginning,  we  may  be  justified  in  turning  to  a  brief 


UNDERSTANDING  BRITISHERS  371 

contrasting  study  of  the  two  people  as  a  means  of  briDging 
out  more  clearly  certain  of  the  distinctive  traits  and  ideals 
of  the  inhabitants  of  both  countries. 

It  is  first  needful  to  remember  that  the  distinctions  in 
the  United  States  are  traditionally  not  of  aristocracies,  but 
of  merit;  not  of  age  and  the  ''sense  of  elevation"  derived 
from  the  contemplation  of  either  majesties  or  monuments 
(since  we  have  none  of  the  former  and  few  of  the  latter), 
but  primarily  the  distinctions  centering  in  men  and  their 
work.  There  is,  moreover,  comparatively  small  respect  in 
America  for  men  of  good  birth  but  of  bad  character  or 
unemployed  talents.  Even  the  adornments  of  the  artistic 
connoisseur,  and  the  idle  or  "gentleman"  class,  find  here 
in  this  land  of  plain  reality  little  more  than  curiosity  and 
that  kind  of  respectful  attention  given  to  unusual  "speci- 
mens." The  crowds  may  line  the  sidewalks  in  front  of  a 
Fifth  Avenue  church  to  watch  the  wedding  procession  of  a 
scion  of  one  of  the  few  old  families  of  wealth  still  left  to 
us ;  but  even  a  casual  study  of  the  faces  and  a  slight  analysis 
of  the  remarks  of  the  spectators  will  reveal  the  abysmal 
difference  between  the  thoughts  called  forth  by  this  spec- 
tacle on  Fifth  Avenue  and  those  seemingly  uppermost  in 
the  minds  of  the  London  watchers  of  nobility  on  Pall  Mall, 
or  at  the  marriage  of  the  son  of  a  duke  or  an  eminent  repre- 
sentative of  an  old  English  house. 

A  chief  engineer,  on  the  other  hand,  returning  from  his 
notable  labors  in  connection  with  the  building  of  the 
Panama  Canal,  calls  forth  a  crowd  as  diverse  in  character 
as  it  is  serious  and  respectful  in  attention,  and  the  man  of 
deeds  is  placed  upon  a  pedestal  of  honor  and  national  regard 
to  which  the  mere  inheritor  of  wealth  or  an  old  family  name 
can  never  hope  to  aspire. 

Through  reasons  more  or  less  evident,  American  ideals 
gather  instinctively  about  people  like  Edison,  of  whom  the 
public  never  tires  of  hearing.  They  like  to  read  how^  he 
spends  long,  sleepless  nights  working  out  his  latest  electrical 
invention,  which  they  are  certain  will  open  new  windows 
into  a  more  usable  world.    The  crowd  never  tires  of  read- 


372      FOREIGN  TRADE  MARKETS  AND  METHODS 

ing  or  hearing  of  Lincoln,  ■whom  certain  European  writers 
have  truthfully  said  was  without  ''distinction"  and  who 
was  undoubtedly  at  times  ordinary,  even  perhaps  vulgar, 
both  in  the  speech  and  manners  of  his  day.  But  Lincoln 
visualized  that  which  Americans  prize  more  highly  than 
coronets  and  Norman  blood — heart  quality — and  the 
nation's  ideals  and  reverence  cling  closely  about  his  memory. 
His  homel}^  wit  and  kindliness  appeal  to  their  love  of 
real  things,  and  they  keep  green  his  grave  with  a  sentiment 
as  deep  as  it  is  disregardful  of  the  lowliness  of  his  early 
social  station  and  possessions.  This  is  not  far  from  the 
innate  respect  felt  in  the  souls  of  all  men  everywhere  for 
great  humanity,  and  in  this  type  of  elevated  regard  the 
dwellers  on  the  North  American  continent  are  second  to 
no  people  beneath  the  sun. 

We  would  not  minimize  the  need,  in  this  country  of 
magic  business  endeavor  and  enormous  raw  material  of  both 
heart  and  hand  (material  which  has  not  yet  had  time  to 
be  worked  into  artistic  expression),  of  the  erection  upon 
these  strong  basic  traits  of  a  superstmcture  of  gentlemanly 
manners  and  a  worship  of  beauty  in  all  its  forms.  This 
is  a  thing  which  time  and  leisure  and  growth  may  be  con- 
ducive to  strengthening,  all  to  the  betterment  of  American 
civilization.  In  such  matters  the  American  may  look,  as 
indeed  in  many  another  thing,  to  the  land  which  gave  Eng- 
land and  these  United  States  a  common  stock. 

To  come  to  a  more  detailed  and  concrete  comparison, 
one  is  at  once  struck  at  the  amazing  contrast  between  the 
Englishman  and  American  in  the  realm  of  feeling  and 
expression.  The  American  is  first  of  all  volubly  expressive, 
while  the  Englishman  is  studiedly  reserved.  The  Britisher 
is  a  kind  of  negationist;  he  is  almost  stoically  repressive, 
and  frequently  inarticulate.  John  Galsworthy  has  said 
that  there  is  no  more  deceptive  person  than  the  English- 
man on  the  face  of  the  globe,  his  deception  being  due  to 
his  inability  as  well  as  his  unwillingness  to  make  himself 
understood.    The  American,  on  the  other  hand,  is  enthusi- 


UNDERSTANDING  BRITISHERS  373 

astic,  fluent,  and  is  quite  ready  usually  to  examine  and 
to  expatiate  upon  his  own  inner  feelings  as  well  as  to  make 
a  guess  at  those  of  other  people.  To  hide  his  feelings  is 
second  nature  to  the  Englishman.  Should  his  emotions  by 
BOme  unwary  chance  get  the  best  of  him,  he  is  usually 
ashamed  of  himself  and  expects  to  be  laughed  at.  He 
deprecates  any  lapse  from  his  suppressed  idealism.  The 
American  feels  that  some  of  this  is  parade,  what  Kobert 
Louis  Stevenson  called,  "A  winking,  curled  and  oiled, 
ultra-eultural-Oxford-don  sort  of  affectation,"  and  dis- 
counts it  accordingly. 

A  few  years  ago  I  was  talking  with  a  young  man  over 
the  omnipresent  tea  urns  at  Oxford  regarding  these  matters 
of  English  and  American  traits,  when  I  ventured  to  suggest 
that  his  father  (a  prominent  Englishman)  was  a  fitting 
example  of  the  Britisher  who  had  accomplished  fine  work 
and  had  not  talked  much  about  it.  "When  I  began  to  speak 
of  a  book  which  had  pictured  this  public  man  with  his 
accomplishments  in  South  Africa,  the  son  swept  the  matter 
aside  with  a  deprecating  gesture,  saying,  "Oh,  the  gov- 
ernor's all  right,"  and  turned  the  conversation  to  the  last 
cricket  match  with  Cambridge. 

At  the  Oxford  Union,  that  miniature  English,  world, 
where,  in  a  manner  strange  to  America,  the  chief  membei's 
of  Parliament  return  to  preside  at  the  sessions,  helping  to 
keep  inviolate  the  English  traits  and  th.e  attitude  of  the 
English  mind  toward  public  service,  I  have  heard  students 
called  down,  severely  for  giving  a  suggestion  of  emotionalism 
in  their  speeches.  In  fact,  one  student,  who  in  our  Ameri- 
can judgment  had  made  by  far  the  best  presentation  of 
the  evening,  was  riddled  as  to  his  argument  and  his  side 
utterly  routed,  because  his  opponents  had  credited  to  him 
an  attempt  to  play  on  the  feelings  of  his  hearers  through 
an  illustration  suggestive  of  "spread  eagleism."  To  the 
American,  accustomed  to  the  public  mode  of  expression 
in  his  own  land,  this  show  of  feeling  would  have  hardly 
been    noticeable,    certainly    not    objectionable.      Another 


374       FOREIGN  TRADE  MARKETS  AND  METHODS 

student  demolished  his  opponent  who  had  been  lured  into 
sentiment  by  saying: 

Sir,  Mr.  has  tried  to  wring  our  hearts.     I  submit,  Sir, 

that  our  hearts  refuse  to  be  wrung! 

The  state  papers,  as  well  as  the  public  addresses  of 
Englishmen,  while  on  a  high  level  of  intellectual  reasoning, 
and  exhibiting  frequently  examples  of  choice  diction,  often 
make  dry  reading  for  the  man  who  has  become  familiar 
with  the  American  type  of  political  presentation.  An 
American  politician  has  observed  that  the  only  parallel  to 
the  human  interest  found  in  the  congressional  records  filed 
away  upon  the  dusty  shelves  in  Washington  are  the 
"popular"  speeches  of  the  members  of  the  House  of  Com- 
mons, reported  in  full  in  the  dreary  columns  of  the  London 
Times. 

A  conservative  master  of  one  of  the  old  colleges  at  Cam- 
bridge remarked  to  me  that  the  principal  objection  he 
found  to  Lloyd  George  (who  was  at  the  time,  several  years 
before  the  war,  delivering  speeches  in  Wales  on  the  land 
question)  was  that  he  reminded  him  of  his  namesake  Henry 
George,  whose  spellbinding  characteristics  were  as  unintel- 
ligible as  they  were  distasteful  to  the  educated  English- 
man. The  attitude  is  reflected  in  the  statement  of  Francis 
Gribble  concerning  Jowett,  the  old  Master  of  Balliol,  a  man 

full  of  milk  of  human  kindness,  but  profoundly  conscious  that 
mUk  makes  a  mess  when  it  boils  over,  and  firmly  resolved  to 
prevent  that  catastrophe  by  keeping  it  in  a  refrigerator. 

The  American  is  easily  moved  and  often  he  is  easily 
convinced.  It  may  be  added  that  he  is  quite  as  readily 
cooled  and  as  readily  unconvinced.  His  across-the-seas  rela- 
tive is  hard  to  be  convinced,  but  when  his  conviction  is 
formed  he  is  a  veritable  bulldog.  One  of  his  countrymen 
said  in  relation  to  his  attitude  regarding  the  European 
war  that  when  the  Englishman  finally  sees  and  seizes  a 


UNDERSTANDING  BRITISHERS  375 

thing,  he  takes  It  with  the  whole  of  his  weight,  and  wastes 
no  breath  in  telling  you  he  has  taken  hold. 

The  American  is  friendly  and  long-suffering.  He  does 
not  grumble  over  trifles,  and  frequently  is  justly  accused 
of  being  indifferent  to  his  rights,  while  the  Englishman  is 
the  most  inveterate  grumbler,  especially  over  little  things, 
to  be  found  extant,  and  withal  the  most  determined  advocate 
of  his  common  rights,  be  these  rights  located  in  Liverpool, 
Cairo,  Calcutta  or  Hongkong. 

As  a  chance  traveler  the  Englishman  is  about  as  com- 
panionable as  a  stone  image  and  equally  communicative. 
His  impermeability  is  a  wonder  of  perfectness.  A  Danish 
gentleman  who  had  lived  most  of  his  life  in  an  English 
colony  told  me  of  his  experience  in  crossing  Russia  on  the 
Siberian  railroad  from  Vladivostok  to  Petrograd,  a  journey 
of  thirteen  days,  in  the  same  compartment  with  an  English- 
man. Their  conversation  during  the  entire  trip  consisted 
in  saying  "Good-morning"  when  they  arose  and  handing 
each  other  the  daily  papers,  for  which  each  one  politely 
thanked  the  other  with  a  bow.  Had  these  two  men  been 
Americans,  at  the  end  of  the  first  day  there  doubtless  would 
have  been  no  subject  in  all  the  range  between  politics,  piety, 
and  personalities,  that  would  have  not  have  been  discussed 
with  fervor  and  thoroughness.  The  second  day  would  have 
doubtless  been  more  difficult  in  the  matter  of  conversation, 
since  they  would  have  told  everything  readily  accessible  the 
first  day,  but  for  the  American,  at  least,  the  first  day's  con- 
versation would  have  paid  for  the  trip,  and  not  to  have 
expressed  himself  would  have  made  the  journey  exquisite 
boredom. 

As  a  tourist,  the  American  is  the  very  epitome  of  good 
nature,  geniality,  curiosity  and  agreeableness.  He  is  a 
first-class  mixer,  talks  easily,  laughs  easily,  and  his  bump 
of  inquisitiveness,  together  with  his  temerity  in  unearthing 
the  unearthable,  has  made  him  the  arch  investigator  of 
the  world.  He  goes  in  where  angels  fear  to  tread,  and 
to  want  to  know  about  anything  is  synonymous  with  find- 
ing out.    When  he  is  well  mannered  (and  it  must  be  remem- 


376       FOREIGN  TRADE  MARKETS  AND  METHODS 

bered  that  not  all  Americans  in  these  days  travel  in 
Cook  parties)  we  venture  to  say,  even  at  the  risk  of  being 
called  prejudiced,  no  world  traveler  of  any  nation  makes 
a  more  charming  and  obliging  comrade. 

In  this  relative  appraisement  of  the  globe-trotting  class 
one  must  remember  the  sources  from  which  the  different 
types  of  .English  and  Americans  come.  America  with  its 
quick  results  and  quick  money  has  foisted  into  the  world 
of  travel  thousands  of  people  whose  forebears  and  ante- 
cedent opportunities  for  culture  have  been  far  removed 
from  those  familiar  to  the  majority  of  the  English  sight- 
seers. A  manufacturer  of  machinery,  for  example,  in  the 
Middle  West  makes  an  unexpected  ten  thousand  dollars, 
and  he  immediately  thinks  of  how  he  can  expend  it  for  his 
family.  An  early  thought  is  to  send  his  kindly,  good- 
natured,  domestically  inclined  wife,  with  her  little  troop 
of  pretty  daughters,  who  are  striving  for  something  that 
their  home  town  does  not  afford,  to  Europe,  or  possibly  on 
a  trip  around  the  world.  They  take  with  them  their  fresh- 
ness, their  vivacity,  their  overbounding  health  and  optimism 
and  joy  in  every  new  sight,  and  their  training  which  has 
been  of  the  sort  that  teaches  them  to  give  full  vent  to  their 
expressions  of  wonder  or  disdain.  The  English  tourists, 
meanwhile,  shrug  their  aristocratic  shoulders  and  exclaim: 
"Those  Americans!"  It  is  sometimes  forgotten  that  it  is 
only  of  late  years  that  the  people  of  the  same  stratum  in 
England  have  been  either  capable  or  desirous  of  ex.tend- 
ing  their  knowledge  or  of  gratifying  their  curiosity  with 
the  scenes  of  foreign  lands.  The  average  middle-class 
Englishman  is  content  with  his  home  and  fireside,  and  with 
good  safe  5  per  cent  investments  on  his  money.  These  are 
more  tangible  and  satisfactory  assets  in  his  eyes  than  the 
investment  in  culture  for  his  wife  and  family. 

Kindliness  and  humaneness,  the  common  American  traits, 
are  responsible  also  for  the  way  in  which  the  sorrows  and 
calamities  of  the  world  cut  our  countrymen  to  the  quick. 
His  extremist  temperament  makes  the  American  prodigal 
and  sometimes  foolish  with  his  wealth,  and  he  is  often  as 


UNDERSTANDING  BRITISHERS  377 

impulsive  as  he  is  excessive  in  his  philanthropy.  Full  of 
nervous  sensibility,  he  weai-s  out  much  mental  and  physical 
energy  by  his  neighborliness.  The  Britisher  in  contrast  is 
seldom  excessive  and  goes  to  extremes  far  less  frequently. 
This  makes  for  a  certain  toughness  of  nervous  fiber  that 
calls  in  turn  for  fewer  sanitariums  in  England  than  in 
America;  this  insensibility  to  the  nerve-racking  stress  and 
strain  of  modern  competitive  existence  has  caused  the 
Englishman  to  be  pointed  out  as  a  good  example  of  the 
conservation  of  energy ;  it  fits  him  peculiarly  for  a  war  of 
exhaustion  in  which  the  proverbial  ability  to  "muddle 
through"  and  take  things  as  they  come  are  rare  talents. 
This  trait  of  repression  and  staying  at  home  in  his  own 
feelings,  this  inaptitude  for  sacrificial  interest  in  others, 
saves  energy  for  the  Englishman ;  it  also  loses  many  oppor- 
tunities for  being  human,  or  so  it  appears  in  the  American's 
eyes. 

In  the  matter  of  ready  adjustment  and  adaptability,  the 
American  easily  outstrips  his  brother  of  English  race. 
Given  the  same  ideals,  the  Yankee  finds  many  more  means 
with  which  to  achieve  them,  since  he  has  fewer  binding 
restrictions  upon  his  working.  His  lack  of  idee  fixe  and 
freedom-confining  traditions  leaves  him  free  to  move  more 
easily  on  his  bearings,  and  makes  it  possible  to  get  things 
done  with  promptness  and  often  while  the  Englishman  is 
thinking  it  over.  The  American  likes  taking  risks  and  is  a 
ready  apostle  of  all  progressive  measures.  His  conservatism, 
however,  is  increasingly  noticeable  along  some  lines.  I  was 
talking  recently  with  the  editor  of  one  of  the  large  American 
magazines  who  said  it  was  his  policy  to  publish  virtually 
nothing  having  to  do  with  current  interests  in  any  part  of 
the  world.  This  is  quite  largely  an  acquired  English  trait, 
and  conservatism  is  naturally  of  slower  rootage  and  growth 
in  a  country  where  newness,  change,  and  advance  are 
attendants  of  all  activities.  That  a  thing  is  fresh  and  un- 
tried, and  heretofore  unheard  of,  is  usually  an  attractive 
recommendation,  when  to  the  more  cautious  Britisher  a 
new  thing  is  intended  to  arouse  hesitation,  if  not  suspicion. 


378        FOREIGN  TRADE  MARKETS  AND  METHODS 

A  prominent  Englisli  writer  related  to  me  recently  an 
experience  which  befell  him  in  connection  with  an  old  and 
very  reliable  publishing  house  in  London.  A  seemingly 
attractive  book  proposition,  involving  a  number  of  volumes 
relating  to  a  widely  popular  subject,  was  presented  and 
one  that  was  afterward  accepted  with  avidity  and  much 
success  by  an  American  firm.  The  Londoner  called  in  a 
member  of  his  company  to  consider  with  him  the  scheme. 
The  method  of  consideration  consisted  of  looking  over  a 
dusty  pile  of  records  to  discover  whether  the  house  had 
ever  engaged  in  a  similar  publishing  venture ;  finding  that 
it  had  not,  the  head  of  the  establishment  immediately  and 
without  further  deliberation  as  to  the  particular  merits  or 
demerits  of  the  plan  before  him,  rejected  the  proposal,  say- 
ing with  a  thoroughly  satisfied  and  conclusive  air:  *'No, 
we  cannot  accept  it;  we  have  never  undertaken  anything 
like  that."  Tradition  ruled,  and  contemporary  interest 
lost. 

A  New  York  publisher  was  next  approached,  and  his 
first  question,  according  to  the  narrator,  was,  ' '  Is  there  any 
similar  set  of  books  in  existence?"  When  he  had  made 
sure  that  the  idea  was  a  new  one  and  after  he  had  con- 
sulted with  his  ''men  on  the  road"  to  find  out  whether 
they  thought  it  would  appeal  to  the  latest  tendency  in 
current  demands,  he  said: 

This  looks  good  to  us.  We  will  take  it.  We  believe  it  will 
make  a  hit  from  the  start,  since  it  is  a  new  angle  of  approach. 

And  it  did,  though  in  England  it  might  have  been  a  dismal 
failure,  and  have  justified  fully  the  hesitation  of  the  London 
publisher.  It  reveals  the  ever  ready  willingness  of  the 
American  to  take  a  chance  on  a  new  thing.  This  same  un- 
readiness to  change  from  the  English  manner  of  doing 
business  has  been  the  reason  for  more  than  one  British 
failure  in  the  Far  East,  as  the  converse  trait  of  fitting  the 
product  to  the  customer  and  the  latest  requirement  of  the 
public  has  spelled  success  especially  for  the  German  in  that 
region. 


UNDERSTANDING  BRITISHERS  379 

It  is  probably  au  fond  the  ideal  of  getting  on,  tlie  aim  of 
success  through  adaptation,  that  is  felt  in  this  drift  away 
from  any  final  or  accepted  way  of  doing  things.  The 
middle-class  Englishman,  constitutionally  solid  and  stolid, 
is  satisfied  and  quite  resigned  to  his  fate  of  middle-class 
existence,  taking  it  as  a  matter  of  course,  and  therefore 
devoting  himself  to  the  immediate  duties  before  him.  No 
large  dreams  or  future  ambitions  blur  his  eyes.  The  Ameri- 
can, on  the  contrary,  is  never  content  and  is  always  seeing 
himself  rising  out  of  present  mediocrity  to  leadership  and 
power  in  the  class  of  business  men  or  stratum  of  society 
immediately  above  him.  The  Englishman,  moreover,  is 
inclined  to  take  his  business  as  a  necessary  evil,  especially 
the  Englishman  of  the  upper  classes:  a  thing  to  be  gotten 
over  as  quickly  as  possible,  so  that  he  may  get  on  to  some- 
thing else:  golf,  shooting,  or  politics,  for  which  he  cares 
infinitely  more  than  for  his  office  work.  The  American 
regards  his  business  as  his  main  activity  in  life;  it  forms 
often  liis  diversion  as  well  as  his  daily  task;  "he  is  all 
business"  is  an  expression  frequently  heard.  It  is  the  one 
thing  for  which  he  delays  his  pleasures  and  recreations  and 
amusements  and  travel,  it  is  the  altar  upon  which  he  too 
often  immolates  matters  of  intellectual  and  cultural  inter- 
ests ;  it  is  a  veritable  religion  to  many,  and  no  man  of  any 
other  nation,  not  even  the  shopkeeping  Chinese,  worships 
more  loyally  or  unintermittingly  the  capitivating  gods  of 
trade. 

It  is  because  of  his  devotion  to  business  that  the  European 
newspaper  artists  never  weary  of  picturing  Uncle  Sam  as 
a  pork  packer  millionaire  and  the  shrewd  Yankee  trader 
with  the  head  of  a  hog  and  the  octopus  body  of  a  trust 
magnate,  "We  have  yet  to  find  a  company  of  foreigners 
either  abroad  or  at  home  who  fail,  after  a  few  moves  of 
the  conversation,  to  bring  up  the  money  wraith  against  the 
American.  Without  doubt  we  have  here  a  subject  of  strik- 
ing interest  close  to  the  nation's  idealism  and  fruitful  of 
marked  comparison  with  English  aims.  That  the  American 
thinks  in  terms  of  money,  and  that  wealth  bulks  large  in 


380        FOREIGN  TRADE  MARKETS  AND  METHODS 

his  estimate  of  success,  no  one  closely  acquainted  with  him 
will  deny,  but  when  it  comes  to  a  comparison  in  the  matter 
of  the  reason  for  acquiring  dollars,  we  doubt  whether  he 
will  be  found  more  materialistic  than  the  Englishman. 

Certain  it  is  that  in  conversation  the  Englishman  has 
been  reared  to  talk  of  other  things  than  his  income.  He 
has  been  trained  to  connect  the  commercial  transaction  with 
a  lower  order  of  society  and  accomplishments  than  those 
represented  by  the  pei'sons  and  activities  connected  with 
public  life,  the  realm  of  letters,  and  especially  the  careers 
of  his  military  and  colonizing  countrymen  on  the  seas  or  in 
distant  climes. 

When  one  turns  to  the  mental  consciousness  of  the  two 
peoples,  and  this  consciousness  is  closely  akin  to  the  spring 
of  their  idealism,  one  finds  sharply  outlined  a  few  dis- 
tinguishing features.  In  the  United  States  it  is  easier  to 
find  persons  who  are  self-conscious  and  imaginative,  and 
who  include  the  past  and  the  future  as  well  as  the  present 
in  their  introspective  sense  of  themselves.  Many  an  Ameri- 
can is  a  dreamer,  and  as  much  of  a  failure  in  a  practical 
way  as  is  the  speculative  Easterner.  There  is  a  marked 
sensitiveness  when  it  oomes  to  the  fear  of  public  opinion 
in  regard  to  his  fellows,  while  the  prevalence  and  the 
flourishing  success  of  almost  every  kind  of  metaphysical  or 
religious  sect  known  on  the  face  of  the  earth  is  a  mark 
of  his  unqualified  mental  receptiveness. 

The  Englishman,  on  the  contrary,  however  much  he  may 
scout  the  idea  of  materiality  in  his  patronizing  attitude  at 
times  toward  his  New  World  cousin,  dwells  in  the  realm 
of  facts,  and  often  in  the  atmosphere  of  a  blind  practicality, 
even  more  than  does  the  American.  As  a  business  maii, 
the  Englishman  is  "awfully  level  headed"  and  gives  the 
impression  to  many  foreigners  of  a  distressing  matter-of- 
factness.  His  religion  he  accepts  as  he  accepts  his  national 
consciousness,  as  a  matter  of  course,  and  one  finds  abstract 
discussions  of  religion  and  philosophy  as  infrequent  and 
usually  distasteful  interlopers  in  the  ordinary  English  con- 
versation.   New  religions  and  anything  that  approximates 


UNDERSTANDING  BRITISHERS  381 

to  fads  and  fancies  are  not  readily  received  in  that  land 
of  conservatism. 

To  the  adaptable  and  ideal-loving  American  the  popular 
sentiment  welcomes  change  so  rapidly  that  in  some  respects 
it  is  open  to  the  Frenchman's  retort  regarding  his  own 
people : 

I  put  no  faith  in  any  of  the  laws  of  literary  history,  except 
in  that  which  consists  in  saying  that  a  fashion  succeeding  an- 
other fails  if  it  is  not  the  absolute  converse  of  that  which  preceded 
it. 

The  solidity  and  imperturbability  of  the  Englishman  in 
contrast  is  often  as  unintelligible  as  it  is  foreign  to  the 
American  temperament. 

It  must  be  remembered,  especially  as  far  as  the  leader- 
ship of  English  thought  and  action  is  concerned,  that  the 
twenty  or  more  large  English  public  schools,  which  have 
no  counterpart  on  earth,  and  which  train  at  least  one 
hundred  thousand  of  English  youth  of  each  generation,  are 
responsible  largely  for  this  uniformity  of  mentality  and 
this  mysteriously  cool,  critical,  and  reserved  manner.  When 
one  appreciates  that  seven-eighths  of  the  important  posi- 
tions, public,  professional,  administrative,  as  well  as  an 
increasingly  large  number  of  notable  posts  in  England's 
present  day  industrial  enterprises,  are  held  by  the  graduates 
of  schools  of  which  Eton,  Harrow  and  Rugby  have  been 
for  generations  the  exacting  models,  there  is  found  at  least 
one  reason  for  the  English  mind.  Here  young  England 
learns  impartial  justice,  and  acquires  the  knowledge  of  how 
to  govern  others  as  well  as  himself.  Here  the  orderliness 
and  obedience  to  law,  so  much  needed  in  the  United  States 
just  now,  becomes  second  nature  to  the  young  Britisher. 
These  schools  cultivate  the  negation  of  self -consciousness,  and 
are  more  or  less  inimical  to  that  type  of  individualism 
which  the  multitudinous  vocational  schools  of  America,  with 
their  emphasis  upon  individual  aptitude,  magnify  and 
develop. 


382        FOREIGN  TRADE  MARKETS  AND  METHODS 

The  negative  philosophy  of  these  schools  of  England, 
whose  spirit  enters  so  largely  into  the  English  ideal,  has 
been  humorously  satirized  in  a  code  of  ten  commandments 
of  the  English  schoolboy,  by  a  French  writer  in  the  Revue 
Politique  et  Parliamentaire. 

1.  There  is  only  one  God,  and  the  Captain  of  football  is  his 
Prophet. 

2.  My  school  is  the  best  school  in  the  world. 

3.  Without  big  muscles,  strong  will,  and  proper  collars,  there 
is  no  salvation. 

4.  I  must  wash  much,  and  in  accordance  with  tradition. 

5.  I  must  speak  the  truth  even  to  a  master,  if  he  believes 
everything  I  tell  him. 

6.  I  must  play  games  with  all  my  heart,  with  all  my  soul, 
and  with  all  my  strength. 

7.  To  work  outside  class  hours  is  indecent. 

8.  Enthusiasm,  except  for  games,  is  in  bad  taste. 

9.  I  must  look  up  to  the  older  fellows,  and  pour  contempt 
on  newcomers. 

10.    I  must  show  no  emotion,  and  not  kiss  my  mother  in  public. 

In  these  training  places  of  English  schoolboys  there  is 
as  little  attention  given  to  bothering  about  one 's  inner  state 
of  consciousness  as  one  can  imagine.  One  teacher  told  me 
that  he  did  not  want  his  boys  to  bother  about  their  souls, 
but  to  take  care  of  their  bodies  and  their  souls  would  take 
care  of  themselves.  As  a  consequence  you  will  rarely  see 
a  high  degree  of  moral  or  mental  sensitiveness  on  the  part 
of  these  graduates.  They  do  not  brood,  neither  do  they 
take  undue  trouble  about  their  future  state.  Neither  do 
they  sit  up  nights  to  do  original  thinking  relative  to  their 
philosophy  of  life.  They  simply  accept  the  traditional 
forms  and  go  steadily  along  in  the  paths  their  fathers  trod. 

But  in  spite  of  the  fact  that  the  methods  of  training 
are  so  strikingly  different,  the  English  method  fits  the 
English  mind,  and  these  schools  have  furnished  a  marvel- 
ous dynamo  for  forging  and  molding  Englishmen. 

As  far  as  mentality  is  concerned,  and  idealism  in  the 


UNDERSTANDING  BRITISHERS  383 

realm  of  intellectual  imagination,  where  idealism  is  par- 
ticularly regnant,  the  American  holds  his  own  with  the 
Englishman.  Prof.  Gilbert  Murray  of  Oxford,  after  teach- 
ing American  college  boys  at  Amherst  for  a  year,  in  answer 
to  my  question  regarding  the  difference  he  noticed  among 
the  students  of  American  and  English  schools,  replied: 
"The  American  boy  is  more  alert,  usually  I  think  more 
intellectual;  he  adapts  his  knowledge  much  more  readily 
to  the  contemporary  conditions  with  which  he  is  closely 
allied.  He  lacks,  however,  the  background  of  knowledge, 
and  especially  the  knowledge  of  the  classics  common  among 
the  students  of  England.  He  also  lacks  in  a  certain  reserve, 
which  is  one  of  the  notable  products  of  the  English  public 
schools. ' ' 

In  a  peculiar  sense  this  college  and  schoolboy  life  of 
the  two  nations  reflects  the  countries  of  which  they  are  a 
part.  The  Englishman,  repressive,  matter  of  fact,  slow  to 
action  but  tenacious  to  the  end,  drawing  his  inspirations 
from  staid  and  sacred  traditions  of  a  great  past,  takes  his 
whole  life  more  practically  and  with  a  self-confidence  that 
often  refuses  to  admit  that  idealism  has  part  or  lot  in  his 
thinking.  The  American,  on  the  other  hand,  who  draws 
his  sentiment  and  ideals  from  the  shining  glory  of  the 
present,  is  not  ashamed  either  of  his  dreams  or  his  optimism. 
He  has  already  seen  so  many  evidences  of  his  constructive 
imagination  that  he  is  willing  to  believe  the  strangest 
miracles  of  his  mind.  By  the  very  expression  of  his  en- 
thusiasm he  grows  more  and  more  convinced  of  the  pos- 
sibilities both  of  his  head  and  of  his  heart.  As  the  years 
roll,  he  will  become  increasingly  conservative,  and  the 
mannerisms  of  a  new  world  state  will  be  tempered  by  the 
gentler  arts  to  which  his  hand  is  already  becoming  ac- 
customed. That  he  will  ever  become  English  either  in  the 
spirit  or  the  revelation  of  his  ideals,  is  not  to  be  expected, 
for  the  breath  which  he  draws  is  filled  with  a  different 
ozone,  for  him  surely  a  more  rarefied  and  exhilarating  air. 
As  the  ground  beneath  his  feet  stretches  away  to  a  con- 
tinent whose  borders  only  have  been  touched  into  life  by 


384        FOREIGN  TRADE  MARKETS  AND  METHODS 

the  magic  of  his  hand,  as  he  beholds  as  now  new  worlds 
abroad  in  which  to  expend  his  genius  for  industrialism, 
likewise  his  idealism  will  grow,  and  his  visions  will  expand 
until  they  are  wide  enough  to  match  his  boundless  dreaming 
and  deep  enough  to  satisfy  his  restless  soul. 


CHAPTER  XXVI 
TRADE  WITH  THE  NEW  EUROPE 

More  than  ever  since  the  European  war  and  the  growing 
financial  relationship  of  the  United  States  with  Europe, 
there  have  been  coming  about  new  trade  relationships  and 
the  bases  are  being  laid  for  routes  of  commerce  heretofore 
unknown  between  the  United  States  and  Europe.  Apart 
from  the  serious  obligation  of  this  country  relative  to  the 
rehabilitation  of  the  European  fighting  areas,  American 
manufacturers  and  business  men  have  appreciated  the 
necessity  of  investments  and  farsighted  business  plans  re- 
lating to  Europe  which  are  bound  to  associate  American 
and  European  markets  in  a  closer  and  more  vital  way  in 
the  future  than  has  been  the  case  in  the  past. 

"We  give  some  of  the  outstanding  features  of  these  markets 
which  merit  very  close  and  exhaustive  study  by  students 
of  trade  and  manufacturers  especially  in  times  when  trade 
routes  are  changing  and  developments  in  shipping  and 
foreign  markets  need  to  be  watched  with  constant  and  con- 
tinuous care. 

Central  Europe. — A  study  of  the  growing  trade  with 
the  political  division  of  Europe  resulting  from  the  war, 
including  Central  European  countries — Russia,  Germany, 
Austria-Hungary  and  Turkey,  reveals  interesting  features. 
It  is  significant  that  in  the  year  1920  American  business 
with  this  area,  measured  in  dollars,  was  greater  than  in  the 
year  preceding  the  war. 

To  Germany  representing  four-fifths  of  the  former  area 
of  the  German  Empire,  with  approximately  five-sixths  of  its 
former  population,  the  United  States  exported  in  1920, 
commodities  valued  at  about  90  per  cent  of  those  sent  to 
Crermany  in  1913.     The  imports  from  the  new  German 

385 


386      FOREIGN  TRADE  MARKETS  AND  METHODS 

Kepublic  during  1920  were  valued  only  at  about  50  per  cent 
of  those  from  the  German  Empire  in  1913,  the  total  official 
valuation  of  the  United  States'  trade  with  Germany  in 
1920  being  in  round  figures  $400,000,000  as  against  $536,- 
000,000  in  the  year  1913. 

American  trade  with  Austria-Hungary  in  1913  amounted 
to  about  $42,000,000,  and  trade  with  the  new  Austria  in 
1920  was  valued  at  $21,000,000,  chiefly  in  foodstuffs  for 
the  immediate  needs  of  the  Austrian  people. 

With  the  Czecho-Slovakia  area  which  was  formerly  a 
part  of  Austria-Hungary,  the  United  States  carried  on  a 
trade  of  about  $17,000,000,  about  equally  divided  between 
imports  and  exports.  Add  to  this  the  enlarged  trade  with 
Jugo-Slavia  and  Greater  Rumania,  and  American  trade 
with  this  section  is  revealed  to  have  been  much  larger  in 
1920  than  in  the  year  1913. 

The  Baltic  trade,  furthermore,  shows  even  a  greater 
increase;  especially  with  Finland,  Esthonia,  Latvia, 
Lithuania  and  Poland.  With  Finland  the  total  in  1920 
was  $24,000,000  against  less  than  $4,000,000  in  1913,  and 
with  the  new  Poland  about  $70,000,000  chiefly  exports  to 
that  country.  The  records  of  each  of  the  Baltic  States 
show  a  substantial  interchange  with  the  United  States  due 
to  the  presence  at  their  ports  of  numbers  of  American 
firms. 

On  the  Mediterranean  coast  the  trade  of  the  United 
States  in  1920  was  many  times  that  of  1913.  With  the 
greatly  enlarged  Greece  it  aggregated  $60,000,000  in  1920, 
against  less  than  $5,000,000  in  1913.  With  Greater  Rumania 
it  was  two  and  a  half  times  as  much  as  in  1913,  and  with 
Bulgaria  15  times  as  much.  With  Turkey  it  amounted  to 
$80,000,000,  against  $25,000,000  in  1913. 

To  summarize,  in  the  entire  world  area  in  which  the  war 
resulted  in  new  governmental  organizations  or  marked 
readjustments  of  boundary  lines,  the  trade  of  the  United 
States  in  1920  was  approximately  $900,000,000,  against 
about  $685,000,000  in  the  year  before  the  war. 

Belgium. — In  the  year  before  the-war  the  United  States 


TRADE  WITH  THE  NEW  EUROPE  387 

exported  to  Belgium  upwards  of  $67,000,000  worth  of  goods, 
while  the  imports  from  that  country  were  approximately 
$100,000,000.  In  1919,  however,  the  total  amount  of  exports 
were  nearly  $323,000,000,  while  imports  amounted  to 
$647,860,000. 

The  high  industrial  development  of  Belgium,  and  her 
large  manufacturing  industries  have  made  this  country  an 
important  factor  in  foreign  markets,  while  her  rapid  revival 
since  the  war  has  revealed  her  inherent  possibilities  for 
both  home  and  foreign  commercial  industry.  Her  indus- 
trial products  have  been  in  iron  and  steel,  the  construction 
of  steam  and  gas  engines,  automobiles  and  machinery  of 
all  kinds,  together  with  the  production  of  zinc,  glass  and 
chemicals,  and  a  very  important  textile  industry.  Belgium's 
coal  mining  is  of  great  importance,  while  there  is  extensive 
agriculture,  cattle  breeding,  dairy  farming  and  the  growing 
of  fruit,  flowers  and  vegetables. 

The  United  States  supplied  8  per  cent  of  the  total  imports 
of  Belgium  in  the  year  1912.  Belgium's  largest  commerce 
was  with  France  and  Germany  previous  to  the  war, 

France. — The  Republic  of  France  carried  on  a  total 
foreign  trade  with  the  United  States  in  the  year  1913  of 
approximately  $146,000,000  in  exports  and  $137,000,000  in 
imports;  in  the  year  1919  these  two  figures  had  grown 
respectively  to  $976,000,000  in  exports  and  $62,000,000  in 
imports. 

Before  the  war  20  per  cent  of  the  population  were  en- 
gaged in  agriculture  as  compared  with  23  per  cent  in 
Germany  and  5  per  cent  in  Great  Britain.  Vineyards,  silk 
culture  and  the  cultivation  of  corn,  wheat,  millet  and  beets 
are  among  the  important  agi'icultural  activities. 

There  are  highly  developed  manufacturing  industries,  the 
chief  being  in  the  line  of  clothing  and  adornment,  textiles, 
foodstuffs,  chemicals,  machinery,  perfumes,  jewelry  and 
novelties.  Approximately  13  per  cent  of  the  population  of 
France  were  employed  in' manufacturing  industries  before 
the  war  as  compared  Avith  25  per  cent  in  Great  Britain  and,, 
17  per  cent  in  Germany. 


388       FOREIGN  TRADE  MARKETS  AND  METHODS 

The  acquiring  by  France  through  the  war  of  the  Saar 
.Valley  coal  mines  adds  17,100>000  tons  of  coal  annual  out- 
put, while  the  return  of  Alsace-Lorraine  adds  to  her  normal 
iron  output  over  23,000,000  tons. 

Of  the  different  nations  the  United  States  and  the  United 
Kingdom  are  the  chief  markets  for  France,  her  total  imports 
from  the  United  States  alone  ranging  between  $1,000,000,- 
000  and  $2,000,000,000  in  the  years  since  the  war,  and 
aggregating  somewhat  larger  than  French  imports  from  the 
United  Kingdom. 

The  large,  new  investment  interests  of  the  United  States 
in  France  assure  an  ever  increasing  trade  between  the  two 
countries,  while  the  sympathetic  entente  between  the  two 
nations  make  for  cordial  relationships  both  political  and 
commercial  in  the  years  to  come. 

Italy. — Together  with  France  and  Belgium  Italy  is  re- 
vealing increasing  signs  of  encouraging  industrial  progress 
since  the  war  particularly  in  her  principal  industries  of 
agriculture,  mining  and  manufacturing.  As  in  France,  wine 
making  is  an  important  industry,  together  with  the  cultiva- 
tion of  olives,  almonds  and  citrus  fruits.  Silk  production 
is  carried  on  by  cultivation  of  the  mulberry  tree,  while  in 
manufacturing  industries,  machinery  and  the  making  of 
steel  are  of  importance,  as  well  as  chemical  industries  and 
the  manufacture  of  foodstuffs. 

The  result  of  the  war  has  given  Italy  extended  territory 
to  the  North,  where  she  acquired  possession  from  Austria 
of  the  Trentino,  and  she  has  also  extended  her  territory  on 
the  Adriatic  coast  through  the  occupation  of  the  former 
Austrian  province  of  Trieste.  This  province  has  an 
area  of  3078  square  miles  and  a  population  of  893,797.  The 
control  of  this  district  assures  Italy  of  Trieste,  an  important 
port  with  a  population  of  about  247,000. 

In  addition  to  this  newly  acquired  territory  Italy  claims 
the  Dalmatian  coast  of  the  Adriatic  which  includes  the 
port  of  Fiume.  These  claims,  however,  are  disputed  by  the 
new  State  of  Jugo-Slavia. 

The  total  foreign  trade  of  the  United  States  with  Italy 


TRADE  WITH  THE  NEW  EUROPE  389 

in  the  year  1913  before  the  war  was  in  exports  approxi- 
mately $76,000,000  and  imports,  $54,000,000,  while  in  the 
year  1919,  these  exports  had  grown  to  approximately  $496,- 
000,000  and  the  imports  had  decreased  to  somewhat  more 
than  $21,000,000. 

Italy's  principal  articles  of  import  from  the  United 
States  for  the  three  years  since  the  war  have  been  in  such 
commodities  as  cotton,  wool,  horsehair,  minerals,  metals, 
manufactures,  cereals  and  vegetable  products,  medicinal 
substances,  gums,  perfumery,  spirits,  beverages  and  oils, 
together  with  pottery  and  glass. 

As  with  France,  the  United  States  is  one  of  Italy's  largest 
foreign  business  clients. 

Spain. — Among  Spain's  chief  products  are  wine  and 
olive  oil.  In  a  recent  year  Spain  manufactured  approxi- 
mately 600,000,000  gallons  of  both  red  and  white  wine  and 
the  valu-e  of  these  exports  comprise  something  like  one- 
seventh  of  Spain's  total  exports.  The  olive  tree  is  one  of 
the  most  important  in  Spain  and  Cordova  is  the  head- 
quarters of  the  olive  oil  industry,  while  Seville  is  the  center 
of  olive  cultivation  for  table  use. 

Since  the  war  the  textile  industries  of  Spain  have  become 
more  important,  comprising  upwards  of  8,000  establish- 
ments for  manufacturing  cotton,  woolens,  silks,  hemp,  dye- 
ing, bleaching  and  associate  industries. 

The  enlarged  use  of  electricity  in  recent  years  has  greatly 
added  to  Spain's  industrial  progress,  there  being  $300,- 
000,000  of  capital  invested  in  hydro-electric  enterprises  in 
this  country. 

Spain's  minerals  include  iron,  copper,  lead,  manganese, 
quicksilver,  silver,  sulphur  and  phosphorus;  her  metal- 
lurgical industries  are  increasing. 

Her  total  foreign  commerce  since  the  war  has  decreased 
approximately  $300,000,000  about  evenly  divided  between 
exports  and  imports,  a  decrease  from  pre-war  commerce, 
though  in  the  year  1919  the  balance  of  trade  was  in  Spain's 
favor. 

In  the  year  1913  the  United  States  stood  fourth  in  the 


390       FOREIGN  TRADE  MARKETS  AND  METHODS 

aggregate  of  both  imports  and  exports  with  Spam,  her 
largest  commerce  being  with  Great  Britain,  France  and 
Germany,  with  a  considerable  trade  with  Argentina. 

Portugal. — Portugal's  principal  industries  are  agricul- 
ture, fruit-raising  and  mining.  As  in  Spain  there  are  large 
olive  groves  and  the  manufacture  of  olive  oil  is  an  important 
industry.  The  wine  industry  centering  in  Oporto  is  a  very 
large  one,  while  the  most  important  mineral  product  is 
copper  which  is  mined  in  the  southern  portion  of  the 
country.  Fishing  is  also  important  as  well  as  the  mining 
of  tin,  iron  and  lead.  There  are  textile  factories  and  can- 
ning factories  among  the  manufacturing  industries,  while 
metallurgical  plants  are  being  developed. 

The  total  foreign  trade  of  Portugal  before  the  war  in 
the  year  1913  was  somewhat  above  $144,000,000,  and  the 
value  of  the  total  trade  of  the  United  States  with  Portugal 
in  1919  was  about  $4,000,000  exports,  and  $7,000,000 
imports. 

Further  details  relative  to  trade  and  specified  markets 
with  European  countries  may  be  secured  by  examining  the 
latest  Commerce  Reports  issued  by  the  Bureau  of  Foreign 
and  Domestic  Commerce,  or  by  writing  this  Bureau  for 
special  reports  on  various  countries  where  trade  informa- 
tion is  desired. 

While  special  emphasis  is  given  in  any  treatise  having 
to  do  with  foreign  trade,  to  the  opening  of  comparatively 
new  markets  in  countries  undergoing  present-day  commer- 
cial and  industrial  development,  the  merchant,  manufac- 
turer and  trader  need  always  to  keep  in  mind  the  older 
markets  of  Europe  which  have  always  played  so  large  a 
part  in  the  overseas  trade  of  the  United  States. 


CHAPTER  XXVII 
CARIBBEAN    MARKETS 

If  proximity  counts,  as  it  most  certainly  does  in  com- 
merce, the  markets  of  the  countries,  our  neighbors  to  the 
South,  fringing  the  Caribbean  Sea,  should  be  of  primal 
interest  to  North  American  traders. 

The  West  Indies  have  been  called  "the  scattered  frag- 
ments of  a  broken  continent,  situated  in  an  extensive 
excavation  apparently  scooped  out  by  the  hand  of  Provi- 
dence." These  fortunate  isles,  together  with  the  northern 
portions  of  South  America,  Panama,  the  Central  American 
Republics,  Mexico  and  Cuba  enclose  a  sea  which  in  the 
annals  of  future  trade,  is  quite  likely  to  rival  for  commerce 
the  history  of  the  Mediterranean. 

In  this  circle  must  be  included  Mexico,  our  nearest 
neighbor,  which  country  has  327  miles  of  her  coast  lying 
on  the  Caribbean,  and  with  her  possible  resources  hardly 
yet  discovered  after  centuries  of  political  and  racial  vicis- 
situdes. No  one  can  appreciate  this  country  until  he  has 
read  at  some  length  of  those  early  days  of  the  Aztecs  who 
fought  with  the  Spanish  conquerors  for  supremacy  on  the 
lofty  Mexican  tablelands,  or  drove  one  another  alternately 
down  to  the  tropic  coasts  of  the  Caribbean.  The  story  of 
the  intrepid  Cortes,  as  told  by  Prescott  in  his  Conquest  of 
Mexico,  has  few  superiors  in  interest,  either  in  the  realm 
of  history  or  romance.  To  know  what  history  lies  behind 
the  modern  Mexican,  whose  trade  we  desire,  is  first  of  all 
essential. 

The  turbulence  which  has  been  associated  with  Mexican 
affairs  of  late  years  has  concealed  from  us  at  times  the  fact 
that  we  are  the  northern  neighbor  of  one  of  the  most 

391 


392        FOREIGN  TRADE  MARI^TS  AND  METHODS 

potential  areas,  as  far  as  resources  and  commerce  are  con- 
cerned, in  the  world.  Here  is  a  vast  country  with  an  area 
of  767,097  square  miles,  with  45,074  miles  of  coast  line  on 
the  Pacific  Ocean  and  1,400  miles  on  the  Gulf  of  Mexico,  in 
addition  to  the  327  miles  already  referred  to  skirting  the 
Caribbean  Sea ;  with  a  population  of  upwards  of  15,000,000, 
for  the  most  part  uneducated  Indians,  business  largely  in 
the  hands  of  foreigners,  wdth  16,000  miles  of  railway  and 
34  deep  water  ports,  Mexico  is  still  waiting  for  sufficient 
political  stability  to  utilize  her  natural  wealth. 

This  wealth  exists  in  mines  of  silver,  copper,  gold,  lead, 
antimony  and  zinc.  The  country  is  rich  in  petroleum,  in 
agricultural  products,  while  her  vast  domains  furnish  ex- 
ceptional opportunities  for  cattle-raising.  The  mountainous 
character  of  the  country  and  Mexico's  numerous  streams 
afford  rich  advantages  for  water  power. 

At  least  $500,000,000  of  American  money  have  been 
invested  in  Mexico  in  mining — probably  more  than  has 
been  spent  by  all  other  nations  combined.  Among  her 
agricultural  products  for  exchange  are  cotton  and  rubber, 
corn,  cacao,  coffee,  heniquen  and  tobacco.  In  the  year 
1913,  previous  to  the  European  war,  silver  amounting  to 
$44,500,000  was  Mexico's  principal  export. 

The  present-day  conditions  give  many  of  those  who  know 
Mexico  well  a  confidence  to  believe  that  this  country,  so 
long  torn  by  strife,  is  now  about  ready  to  begin  a  con- 
structive and  permanent  upbuilding  and  that  the  United 
States,  naturally,  should  be  in  the  future  Mexico's  greatest 
customer  as  well  as  her  leading  market.  This  depends 
quite  largely  upon  the  manner  in  which  w^e  may  become 
at  this  vitally  important  moment  in  Mexico's  destiny,  her 
friend  and  commercial  aid. 

We  look  far  over  the  seas,  spending  money  without  stjnt 
for  markets  and  also  for  raw  materials  for  our  manufac- 
tures. In  this  world-wide  search  for  trade,  it  is  well  for 
Americans  to  remember  Mexico — our  next-door  neighbor. 

Cuba. — Ninety  miles  south  from  Key  West,  lying  in  the 
line  of  one  of  the  great  trade  routes  of  the  world,  is  Cuba, 


CARIBBEAN  MARKETS 


393 


an  island  from  20  to  100  miles  in  breadth  and  730  miles 
long,  with  an  area  somewhat  larger  than  the  State  of 
Pennsylvania.  Its  landlocked  harbors,  its  13,000,000  acres 
of  forest,  its  superlatively  rich  tropical  vegetation  and 
resources,  together  with  its  delightful  climate,  make  a  pos- 
sible habitation  for  certainly  three  times  its  present  two 
millions  of  population.  Its  sugar,  its  tobacco,  its  fruit, 
its  latent  agricultural,  mineral  and  industrial  wealth,  are 
worthy  of  particular  notice  by  North  Americans.  The 
following  table  gives  an  idea  of  American  exports  to  Cuba 
and  the  relation  between  these  exports  sent  to  other  of  the 
West  Indian  Islands : 


1915 

1918 

Cuba 

$  95,750,004 

44,318,151 

13,948,820 

7,447,182 

4,899,856 

2,698,050 

1,269,808 

882,442 

$227,156,047 

Porto  Rico 

54,043,349 

British  West  Indies 

21,432,437 

16,156,443 

9,069,275 

Dominican  Republic 

Haiti 

French  West  Indies 

5,357,451 

Dutch  West  Indies 

1,361,434 

Virgin  Islands 

1,640,130 

Total   

$170,914,333 

$336,216,539 

The  total  for  1918  represents  an  increase  of  97  per  cent 
over  that  of  1915. 

Cuba  is  particularly  of  interest  to  American  trade  be- 
cause of  the  happy  political  relations  which  have  existed 
since  the  Spanish  American  war  and  the  enlarged  develop- 
ment of  Cuba  will  naturally  mean  an  enlarged  trade 
between  this  Island  Republic  and  the  United  States. 

Cuba  is  called  "a  prospective  four  million  ton  sugar  cane 
proposition."  In  1919  it  had  already  approximated  4,000,- 
000  tons.  The  sugar  crop  exceeds  in  value  ten-fold  the 
tobacco  crop  and  Cuba's  total  commerce  has  reached  $700,- 
000,000  annually,  the  United  States  possessing  a  major 
part  of  this  trade,  taking  about  85  per  cent  of  Cuba's 


394       FOREIGN  TRADE  MARKETS  AND  METHODS 

exports  and  supplying  the  Island  with  about  60  per  cent 
of  her  import  requirements.  Cuba  is  a  constant  market, 
for  foodstuffs,  machinery,  tools,  hardware,  chemicals,  tex- 
tiles, shoes  and  drugs. 

Cuba  has  been  called  "the  world's  sugar  bowl."  Steam- 
power  machinery  driving  out  the  old  picturesque  windmills, 
with  the  vacuum  pan  conserving  that  which  formerly 
went  to  waste  in  the  processes  of  evaporation,  have  come 
to  the  help  of  sugar  production  in  this  rich  island. 

To  British  India  and  to  the  Caribbean  section  the  world 
looks  to-day  for  its  chief  cane  sugar  producing  areas. 
British  India  in  1914-1915  produced  2,400,000  tons  of  sugar, 
while  the  Caribbean  output  was  3,243,000  tons.  Of  this 
latter  Cuba  produced  2,600,000  tons.  This  amount  has 
increased  vastly  each  year  since  1914-1915. 

As  far  as  international  trade  in  sugar  is  concerned  the 
Caribbean  region  far  outranks  all  other  markets  since 
British  India,  one  of  the  oldest  sugar  producing  countries, 
consumes  its  own  production  and  in  addition  imports 
annually  about  $25,000,000  worth  of  sugar.  Comparatively 
little  of  the  West  Indies  production  is  not  transported. 

The  United  States  trade  in  sugar  is  revealed  by  the  fact 
that  Cuba  in  a  recent  year  furnished  to  this  country 
4,785,000,000  pounds  of  sugar,  the  total  consumption 
of  sugar  for  that  year  (1914-1915)  being  8,630,000,000 
pounds. 

American  producers  as  well  as  the  owners  of  sugar  indus- 
tries in  Cuba  are  increasingly  important.  In  1912  and 
1913  a  Britisher  Consular  Report  stated: 

A  very  large  proportion  of  the  mills  (in  Cuba)  are  in  the 
hands  of  Americans,  and  it  is  probable  that  not  more  than  one- 
third  of  the  mills  remain  in  Cuban  hands. 

Among  the  other  resourceful  sections  of  the  West  Indies, 
important  for  American  markets,  are  Porto  Rico  and  the 
Virgin  Islands  belonging  to  the  United  States,  while  the 
Islands  of  Haiti  and  San  Domingo  are  closely  related  both 


CARIBBEAN  MARKETS  395 

by  political  control  and  commerce  to  this  country.  Porto 
Rico  counts  sugar  among  its  chief  exports,  sugar  making 
up  nearly  half  of  its  exports  in  value,  although  tobacco, 
coffee  and  tropical  fruits  are  important.  The  Island  imports 
foodstuffs,  machinery  of  all  kinds,  cotton  goods  and  shoes. 
United  States  money  is  used  and  there  is  an  excellent  ship- 
ping service. 

Haiti's  chief  exports  are  coffee,  cocoa,  dyewoods  and 
medicinal  gums  and  her  imports  are  similar  to  those  of 
Porto  Rico. 

San  Domingo  produces  Caribbean  products  such  as  sugar 
cane,  cocoa,  tobacco,  coffee  and  also  raises  bananas;  she 
also  exports  dyewoods  and  hides.  Her  imports  consist  of 
cotton,  cotton  goods,  iron,  steel  and  foodstuffs  which  are 
largely  (at  least  70  per  cent)  from  the  United  States,  while 
she  sends  50  per  cent  of  her  exports  to  this  country. 

The  Central  American  States  consist  of  five  Republics 
and  British  Honduras  and  Panama  add  practically  the 
same  kind  of  products  to  the  Caribbean  markets,  with  a 
very  much  increased  trade  in  bananas.  In  this  industry 
Costa  Rica  leads,  while  Guatemala's  chief  export  is  coffee. 
Other  exports  are  tobacco,  indigo,  rice,  sugar,  cocoa  and 
cocoanuts,  the  bulk  of  the  business  in  these  Republics  being 
in  United  States  hands,  many  Americans  living  in  these 
sections.  Our  chief  competitors  are  England,  Germany  and 
France. 

Imports  to  these  Republics  include  practically  everything 
in  manufactured  supplies  such  as  cottons,  woolens,  iron 
and  steel  supplies,  food  products,  and  agricultural  products, 
electrical  supplies  and  hardware. 

The  trade  in  tropical  fruit  in  the  Caribbean  section 
promises  to  be  an  increasing  business,  while  the  tobacco 
industry  in  Cuba,  as  well  as  the  oil  resources,  may  be 
studied  with  profit  by  American  capitalists  and  commercial 
developers. 

The  Land  of  the  Banana. — It  is  in  the  banana  industry 
especially  in  which  Americans  have  had  a  very  large  share 
in  these  Caribbean  markets  and  a  brief  study    of    this 


396       FOREIGN  TRADE  "MARKETS  AND  METHODS 

industry  in  relation  to  the  character  of  the  population  and 
the  possibility  of  American  enterprise  makes  a  fascinat- 
ing chapter  in  foreign  commerce  in  Central  American 
markets. 

To  most  of  us  the  banana  is  usually  connected  in  some 
far  away  and  mysterious  manner  with  the  tropics.  We 
recall  with  certain  vividness  a  picture  seen  in  our  youth 
of  a  solemn-looking  missionary  with  open  Bible  standing 
beneath  the  protecting  leaves  of  a  banana  tree,  preaching 
to  a  small  band  of  naked  savages  clustered  about  him.  The 
thought  of  the  banana,  if  we  think  of  it  at  all,  brings  to 
the  imagination  visions  of  indolent  natives  clad  in  abbrevi- 
ated clothing,  wandering  in  luxuriantly  hung  banana 
groves,  where  without  effort  or  exertion  on  their  own  part, 
they  have  only  to  pull  down  the  golden  fruit  with  which 
generous  tropical  nature  has  provided  them. 

But  these  are  sehoolbook  visions  and  pretty  delusions, 
since  we  all  know  if  we  have  studied  the  banana  industry 
at  all,  that  tropical  jungles  are  foodless  wastes  and  that 
there  are  no  wild  bananas  fit  to  eat.  "We  also  discover  soon 
that  those  dauntless  pioneers  who  through  a  series  of  vicis- 
situdes that  would  have  daunted  the  average  man  have 
made  it  possible  to  bring  into  the  United  States  yearly  more 
than  40,000,000  bunches  of  bananas,  creating  a  commerce 
amounting  to  more  than  $105,000,000,  have  at  the  same 
time  created  an  enterprise  which  deserves  to  rank  with  the 
greatest  achievements  of  the  last  twenty-five  years. 

It  is  only  when  some  attempted  legislation  by  short- 
sighted lawmakers  has  brought  this  matter  to  the  attention 
of  the  multitude  that  we  have  given  any  considerable  atten- 
tion to  the  growing  reign  of  the  banana  amongst  us.  When 
some  years  ago  a  bill  to  tax  this  tropical  fruit  with  a  tariff 
of  five  cents  a  bunch  was  presented  to  Congress,  the  press 
of  the  nation  voiced  the  conviction  of  the  masses,  and  with 
one  united  protest  squashed  this  attack  upon  a  product 
which  had  come  to  be  a  settled  fact  in  the  lives  of  millions. 
John  O'Keefe  in  the  New  York  World  delivered  his  message 
in  verse  regarding  this  matter : 


CARIBBEAN  MARKETS  397 

We  are  anxious  that  beef  should  be  cheaper, 

So  we'll  lower  the  tariff  on  cow; 
Though  it  comes  from  the  Plate  or  the  Dnieper, 

We  will  lessen  its  price  to  the  frau; 
And  the  wheat  of  the  Muscovite  reaper 
May  sustain  the  American  man; 
But  far  greater  than  these 
Is  the  joy  that  he  sees 
As  he  lives  on  the  handy  banan'! 

As  we  write  these  words  in  the  midst  of  a  great  banana 
plantation  in  Central  America,  as  far  as  the  eye  can 
penetrate  the  waving  fronds  of  these  tropical  trees  can  be 
seen,  and  the  ship  that  brought  iis  here  will  carry  back 
to  New  York  80,000  bunches  of  this  golden  fniit.  During 
a  recent  year  the  United  Fruit  Company  shipped  to  the 
United  States  24,975,640  bunches  of  bananas.  Counting 
a  standard  bunch  as  containing  144  individual  bananas,  a 
little  arithmetic  will  show  you  that  this  company,  organized 
in  1899,  is  instrumental  in  bringing  to  the  United  States 
yearly  more  than  3,000,000,000  bananas,  for  whose  cultiva- 
tion and  production  the  company  employs  more  than  60,- 
000  men,  a  large  fleet  of  ships,  and  places  behind  the 
project  assets  of  over  $80,000,000. 

In  these  days  when  we  are  turning  our  eyes  to  the  pos- 
sibilities of  industrial  and  commercial  accomplishment  in 
lands  other  than  our  own,  the  conquest  of  the  tropics  in 
behalf  of  the  banana  enterprise  by  American  business  men 
is  a  story  of  inspiration  and  enchantment. 

It  is  a  saying  frequently  heard  in  the  tropics,  that 
*' nature  knows  how  to  grow  bananas,  but  man  had  to  learn 
how  to  ripen  them."  The  history  of  how  this  lesson  was 
learned  cannot  be  more  vividly  revealed  than  in  the  example 
of  the  United  Fruit  Company,  which  now  stands  in  the 
forefront  of  the  banana  industiy  of  the  world — a  company 
which  is  said  to  have  put  Central  America  on  the  com- 
mercial map.  That  small  band  of  New  England  merchants 
who  dared  to  venture  on  uncharted  commercial  seas  about 
twenty  years  ago  with  a  small  initial  investment  of  only 


398       FOREIGN  TRADE  MARKETS  AND  METHODS 

$20,000,  took  as  their  ideal,  "Small  profits  on  big  sales." 
They  systematized  the  banana  industry  which  up  to  that 
time  had  been  only  a  business  specialty.  They  conceived 
the  idea  of  buying  the  land  upon  which  to  raise  their 
products.  They  departed  from  the  generally  accepted  rule 
of  concentrating  commercial  energies  and  insured  their 
interests  against  the  inevitable  climatic  disturbances  of 
tropical  regions  by  scattering  their  endeavors  and  posses- 
sions over  Cuba,  Jamaica  and  Central  America.  They  made 
plans  at  an  early  date  in  the  progress  of  the  enterprise 
to  raise  their  own  live  stock  for  transportation  purposes 
and  for  the  subsistence  of  their  workmen,  and  they  now 
own  more  than  30,000  head  of  live  stock,  valued  at  more 
than  $1,000,000. 

These  far-sighted  business  projectors  of  trade  saw  also 
the  necessity  of  building  railroads  and  tramways  and  con- 
structing ships  suitable  for  carrying  the  most  perishable 
of  products  to  northern  ports.  The  result  of  this  foresight 
is  30,000  miles  of  railways  and  tramways  owned  or  operated 
by  this  company,  adding  to  the  firm's  a«sets  more  than 
$10,000,000,  together  with  a  great  fleet  of  ships  aggregating 
a  tonnage  of  more  than  400,000  tons  and  valued  at  upwards 
of  $15,000,000. 

Not  the  least  advantage  of  this  enterprise,  organized 
particularly  for  the  fruit  trade,  exists  in  the  so-called 
"great  white  fleet,"  which  accommodates  more  than  3000 
passengers  and  has  introduced  so  many  hundreds  of  Ameri- 
cans within  three  brief  sailing  days  to  the  tropics. 

The  problems  connected  with  the  banana  industry  are 
many  and  various,  but  the  labor  question  is  one  always  to 
be  reckoned  with.  Modern  production  of  this  fruit  is 
carried  forward  on  such  a  large  scale  that  it  has  necessitated 
the  importation  of  workmen.  The  Panama  division  of  this 
company  employs  7000  men  and  these  are  scattered  over 
plantations  embracing  more  than  170  square  miles  of  land. 
The  majority  of  these  laborers  one  finds  in  the  banana 
groves  of  Central  America  are  negroes  from  Jamaica  or 
other  islands  of  the  West  Indies.    Although  the  wages  paid 


CARIBBEAN  MARKETS  399 

by  the  large  banana  companies  are  far  larger  than  has  ever 
before  been  offered  in  this  part  of  the  world,  practically 
as  high  as  those  given  in  the  United  States,  it  is  well  nigh 
impossible  to  tempt  the  average  Central  American  native  to 
work.  Moreover  many  of  them  seem  to  be  incapable  of 
sustained  manual  labor. 

Generally  speaking,  there  are  three  classes  of  people  in 
Central  America :  the  aristocracy,  composed  of  the  educated, 
land-owning  and  official  class,  who,  as  a  rule,  decline  to 
interest  themselves  in  business  or  in  modem  agriculture; 
a  small  middle  class  which  contains  the  men  of  salaried 
occupations  and  professions;  and  Indians  composing  num- 
berless tribes  and  following  many  customs  excepting  the 
habits  of  physical  labor,  for  which  they  seem  to  hold  an 
inveterate  repugnance.  Whether  it  is  because  he  lives  in 
a  country  where  the  conditions  of  soil  and  climate  remove 
much  of  the  incentive  and  necessity  to  work,  or  whether, 
like  some  of  his  white  brethren  farther  north,  the  Indian 
was  bom  lazy,  are  questions  for  the  ethnologist.  The  Ameri- 
can, German  or  British  business  man,  however,  accepts 
these  conditions  and  calls  the  West  Indian  Negroes  by  the 
tens  of  thousands  to  the  various  modern  industries  of 
Central  and  South  America. 

No  one  should  forget  that  the  huge  task  of  developing 
the  neglected  wilds  of  Central  and  South  America  is  largely 
the  task  of  the  negro  as  far  as  manual  labor  is  concerned, 
and  in  no  part  of  the  world  has  the  black  man  proved  more 
surely  his  raison  d'etre. 

After  the  visitor  from  the  North  has  ridden  for  a  hundred 
miles  through  such  Central  American  banana  sections  as 
are  found  in  the  Changuinola  and  Sixaola  districts  lying 
along  the  Caribbean  coasts,  and  has  beheld  the  250  miles 
of  carefully  constructed  railway,  linking  an  area  of  109,000 
cultivated  acres  of  bananas  belonging  to  the  United  Fruit 
Company,  where  the  largest  and  choicest  bananas  to  be 
found  anywhere  in  the  world  are  raised,  he  will  begin  to 
realize  that  there  are  some  Americans  at  least  who  have 
heard  the  call  of  the  tropics  as  a  challenge  for  industrial 


400        FOREIGN  TRADE  MARKETS  AND  METHODS 

enterprise.  He  will  gain  a  new  respect  for  his  own  country- 
men as  well  as  learn  to  be  chary  about  loose  talk  concern- 
ing the  worthlessness  of  the  negro  race.  It  is  the  happy 
combination  of  northern  capital  and  intelligent  organiza- 
tion with  the  physical  labor  of  the  negro,  who  has  found 
his  natural  habitat  beneath  southern  skies,  that  is  now  cre- 
ating the  new  wealth  of  these  republics  and  reclaiming  for 
the  people  of  all  lands  the  beneficent  uses  of  the  tropical 
wilderness. 

That  this  vast  banana  industry,  finding  its  home  in  the 
beautiful  island  of  Jamaica  and  along  the  coasts  of  the 
Central  American  republics  especially,  has  made  an 
enormous  contribution  to  the  food  welfare  of  the  nations, 
cannot  be  denied. 

One  of  the  cheapest  food  products,  which  in  the  fluctuat- 
ing periods  of  high  and  low  food  prices  has  maintained 
essentially  the  same  low  and  even  cost,  one  of  the  most 
difficult  products  to  grow  and  to  ship  because  of  the  reasons 
we  have  narrated,  and  by  reason  of  the  perishable  character 
of  the  banana,  this  is  now  offered  for  sale  in  the  United 
States  and  abroad  at  all  times  in  the  year  for  less  than 
the  average  prices  charged  for  hardy  native  fruits  grown 
only  a  few  miles  from  our  city  markets.  This  feat  has 
been  accomplished  by  the  outlay  of  fortunes,  and  in  fair 
competition  between  scores  of  banana  companies  operating 
in  these  tropics. 

The  situation  and  the  work  of  the  banana  companies 
which  have  been  spending  money  and  men  so  freely  for  the 
last  twenty  years  have  been  summarized,  thus,  by  an 
editorial  in  the  Houston  Post: 

How  does  it  happen  that  the  home  grown  apple  is  placed 
beyond  the  reach  of  the  average  consumer  and  that  the  foreign 
grown  bananas  increased  in  quality  and  decreased  in  price?  The 
banana  is  a  perishable  fruit.  It  must  be  marketed  immediately 
on  its  importation,  and  the  business  is  one  which  requires  milHons 
in  investment  and  the  risks  incident  to  fleets  sailing  in  waters 
menaced  by  hurricanes  and  northers.  It  is  a  farce  when  apples 
grown  within  10  miles  of  St.  Louis  or  New  York  sell  by  weight 


CARIBBEAN  MARKETS  401 

for  10  times  the  price  charged  for  bananas  shipped  from  Costa 
Rica  or  Colombia,  South  America. 

There  is  no  secret  about  the  low  cost  of  bananas.  They  are 
produced  and  handled  on  an  enormous  scale  by  companies  which 
put  thorn  on  the  market  without  the  intervention  of  middlemen 
who  extort  large  commissions.  These  companies  have  learned 
that  there  is  more  money  for  them  in  selling  a  huge  total  of 
product  at  a  low  net  profit  than  there  is  in  extracting  a  high 
profit  from  small  sales  at  prices  prohibitive  to  the  average  con- 
sumer. When  those  in  the  apple  business  learn  the  lesson  there 
will  be  more  orchards,  less  apples  rotting  on  the  gi'ound  and 
more  prosperity  and  happiness  for  all  concerned.  Consider  the 
banana ! 

Bananas,  like  sugar,  the  other  cheap  and  more  or  less 
uniform,  product  as  regards  price,  are  being  produced  and 
marketed  in  line  with  scientific  and  comprehensive  systems, 
thus  avoiding  the  waste  and  losses  consequent  upon  petty 
and  badly  managed  production.  No  one  can  study  this 
vast  business  in  the  region  of  the  American  tropics  with- 
out coming  to  the  conclusion  that  the  achievements  of 
Americans  in  this  remarkable  field  of  trade  may  be  dupli- 
cated in  both  kind  and  degree  in  many  another  line,  given 
the  same  persistent  spirit  and  daring  that  have  actuated 
the  leadership  of  such  concerns  as  the  United  Fruit  Com- 
pany and  their  able  competitors  in  one  of  the  most  difficult 
fields  of  industrial  production. 


CHAPTER  XXVIII 
WINNING  SOUTH  AMERICAN   TRADE 

The  material  resources  of  South  America  are  in  some  important 
respects  complementary  to  our  own;  that  continent  is  weakest 
where  North  America  is  strongest  as  a  field  for  manufacturers; 
it  has  comparatively  little  coal  and  iron.  In  many  respects  the 
people  of  the  two  continents  are  complementary  to  each  other; 
the  South  American  is  polite,  refined,  cultivated,  fond  of  literature 
and  of  expression  and  of  the  graces  and  charms  of  life,  while  the 
North  American  is  strenuous,  intense,  utilitarian.  Where  we 
accumulate,  they  spend.  While  we  have  less  of  the  cheerful 
philosophy  which  finds  sources  of  happiness  in  the  existing  con- 
ditions of  life,  they  have  less  of  the  inventive  faculty  which  strives 
continually  to  increase  the  productive  power  of  man  and  lower  the 
cost  of  manufacture.  The  chief  merits  of  the  peoples  of  the  two 
continents  are  different;  their  chief  defects  are  different.  Mutual 
intercourse  and  knowledge  cannot  fail  greatly  to  benefit  both. 
Each  can  learn  from  the  other;  each  can  teach  much  to  the  other; 
and  each  can  contribute  greatly  to  the  development  and  prosperity 

'of  the  other.  A  large  part  of  their  products  find  no  domestic 
competition  here;   a  large  part  of  our  products  will  find  no 

•domestic  competition  there.  The  typical  conditions  exist  for 
that  kind  of  trade  which  is  profitable,  honorable,  and  beneficial 
to  both  parties. — Elihu  Root. 

The  word  "winning"  is  used  with  premeditation  in  the 
sense  of  a  race  to  be  won,  a  race  in  which  our  competitors 
'are  trained  for  the  contest  as  we  in  the  United  States  are 
not. 

South  American  trade  will  not  be  acquired  merely  by 
-wishing  for  it,  nor  by  writing  pleasant  compliments  about 
Latin  Americans,  nor  by  patronizing  South  Americans, 
nor  by  a  sudden  dash  of  advertising,  nor  by  starting  busi- 

402 


WINNING  SOUTH  AMERICAN  TRADE  403 

ness  agencies.  All  of  these  things  have  their  place,  but  it 
must  be  remembered  that  the  gaining  of  the  greatest  neutral 
market  in  the  world  is  to  represent  a  contest,  and  that 
this  pearl  of  great  price  commercially — ^the  markets  of  a 
richly  developing  continent — is  to  be  won  by  serious  and 
intelligent  effort,  by  most  thoughtful  and  statesmanlike 
organization,  and  by  rendering  the  most  efficient  service  of 
which  our  best  American  brains  and  skill  are  capable. 

Despite  the  fact  of  the  world-wide  business  depression 
occurring  in  the  latter  part  of  1920  and  during  the  year 
1921,  attended  by  world-wide  deflation  and  the  disorganiza- 
tion of  money  exchange,  foundations  have  been  slowly  but 
truly  laid  for  a  rehabilitated  foreign  trade  with  Latin 
America. 

The  new  trade  with  South  America  consequent  upon  the 
European  war  developing  our  investments  at  home  in  new 
productive  enterprises  to  the  extent  variously  estimated 
between  $6,000,000,000  and  $9,000,000,000  has  turned  the 
eyes  of  our  manufacturers  and  traders  particularly  to  the 
needs  and  opportunities  of  Latin  American  markets.  The 
Government  has  assisted  this  new  trade  by  new  Federal 
statutes  such  as  the  Webb  Law,  the  Edge  Act,  and  certain 
shipping  legislation  intended  to  assist  materially  in  aiding 
American  commerce  to  compete  successfully  with  European 
trade  in  South  America. 

The  Webb  Law  has  made  possible  combinations  of 
capital  prohibited  under  the  provisions  of  the  anti-trust 
laws,  making  it  possible  for  various  manufacturing  interests 
in  the  same  or  similar  lines  to  combine  as  a  unit  for  foreign 
commerce  rather  than  maintaining  extensive  separate 
organizations.  Already  American  companies  have  taken 
advantage  of  this  Act.  The  subsidized  foreign  trade  inter- 
ests of  Great  Britain  and  Germany  and  such  arrangementa 
as  those  furnished  by  the  Cartels  of  Germany,  existing 
previous  to  the  war,  may  be  successfully  matched. 

The  services  furnished  by  the  Webb  Law  to  commerce 
have  a  duplicate  in  the  Edge  Act  and  its  advantages  to 
banking.    The  organization  of  international  banks  with  the 


404       FOREIGN  TRADE  MARICETS  AND  METHODS 

power  to  negotiate  long  term  credits  and  the  endorsement 
of  notes  and  bills  in  connection  with  foreign  commerce 
transactions,  together  with  the  right  to  purchase  American 
exporters'  foreign  bills,  notes  and  obligations,  issuing 
against  these  their  own  acceptances,  notes  and  debentures, 
is  a  real  step  forward  in  fundamental  foreign  trade  build- 
ing. There  would  seem  to  be  a  possibility  here  of  meeting 
the  necessity  for  long  term  credits  demanded  by  South 
American  houses,  since  the  Edge  Act  makes  possible  the 
extension  not  only  of  credit  but  the  loan  of  capital  for  the 
assistance  of  foreign  trade. 

The  organization,  furthermore,  of  such  bodies  as  the 
Foreign  Trade  Financing  Corporation,  together  with  the 
more  thorough  and  systematic  construction  of  chambers  of 
commerce  between  North  American  and  Latin  American 
countries  have  been  a  step  in  advance,  making  ready  for 
new  progress.  The  present  administration  has  revealed  its 
sympathetic  cooperation  with  Latin  American  trade  and 
with  Latin  Americans  generally  by  its  passage  of  the 
Colombian  Treaty  and  by  frequent  sympathetic  utterances 
by  President  Harding  who  has  voiced  the  general  trend 
of  feeling  throughout  the  United  States  regarding  an 
enlarged  commerce  with  our  Southern  neighbors. 

The  Panama  Canal  is  another  vital  asset  to  trade  with 
South  America  and  is  destined  to  reveal  a  possibility  for 
usefulness  beyond  anything  known  previous  to  or  during 
the  war.  It  may  be  said  that  we  are  just  beginning  to 
appreciate  the  advantage  of  the  Panama  Canal  as  an 
instnimentality  for  Pan-American  commerce.  In  the 
calendar  year  1920,  the  net  tonnage  of  vessels  passing 
through  the  canal  aggregated  10,378,265  tons  as  against 
8,919,149  net  tons  in  the  calendar  year  1919. 

The  activity  of  the  present  Shipping  Board  and  the  afore- 
said sympathy  of  the  Administration  for  overseas  com- 
merce gives  promise  of  legislation  favoring  American  ship- 
ping interests,  which  is  absolutely  essential  for  the  success- 
ful transportation  of  our  manufactured  exports  and  the 
bringing  home  of  the  various  raw  materials  and  diverse 


WINNING  SOUTH  AMERICAN  TRADE  405 

imports  from  foreign  countries  required  for  the  up-building 
of  our  industries  and  national  life. 

In  spite  of  the  fact  that  tariff  legislation  and  discussion 
during  the  year  1920  has  tended  to  create  certain  foreign 
antagonism,  despite  the  fact  that  high  protective  tariff 
at  this  time  of  changing  conditions  tends  to  disregard  the 
vast  investments  of  our  country  in  foreign  lands,  there  are 
indications  which  lead  one  to  believe  that  the  good  sense 
of  Americans  will  predominate  over  political  partisanship 
and  preference,  and  that  tariff  laws  will  be  passed  adapted 
to  foster  and  to  develop  rather  than  to  retard  and  nullify 
the  many  fundamental  activities  just  mentioned  for  the 
promoting  of  American  commerce. 

Given  these  new  supports  for  our  foreign  trade,  there  are 
still  further  essentials  needed  for  winning  South  American 
confidence  and  gaining  a  permanent  foothold  among  these 
progressive  peoples,  whose  continent  is  on  the  threshold 
of  a  vast  awakening. 

It  is  of  prime  importance  for  the  welfare  of  the  United 
States,  as  well  as  for  these  nations  themselves  to  give  aid 
to  these  republics,  both  by  capital  and  by  service.  It  Is 
important  for  the  United  States  to  gain  tangible  visibility 
in  South  America  by  the  actual  presence'  of  American 
capital,  not  in  American  banks  simply,  but  also  in  general 
business  enterprises.  It  is  essential  for  our  business  houses 
to  open  branch  offices  and  carry  stocks  in  South  America, 
to  invest  in  their  bonds  and  public  utilities,  to  furnish 
capital  for  South  American  railways,  port-works  and  irriga- 
tion entei*prises,  to  assist  them  by  funds  as  well  as  by 
engineers  to  tunnel  their  mountains,  to  open  up  their  mines, 
to  furnish  cities  with  electrical  power  for  public  service 
work,  to  build  packing  houses  and  meat  refrigerating  plants, 
and  in  general  to  assist  South  America  to  develop  her  latent 
resources  and  industries. 

In  no  other  way  will  American  business  gain  a  foot- 
hold in  Latin  America  more  quickly  than  by  the  use 
of  capital  combined  with  sympathetic  cooperation  with  these 
peoplas  in  tlie  development  of  their  rich  continent. 


406       FOREIGN  TRADE  MARKETS  AND  METHODS 

That  trade  follows  the  dollar  is  a  truism.  South  Ameri- 
cans are  Latins  by  heritage,  and  their  traditions  differ  from 
our  Anglo-Saxon  ones,  but  South  Americans  are  as  human 

0 

as  are  the  Chinese,  or  the  Egyptians,  or  the  East  Indians, 
or  any  other  race  when  it  comes  to  giving  a  preference  to 
those  who  pour  money  into  their  country's  development. 
One  needs  only  to  observe  the  hold  of  the  Englishman  upon 
Argentina  through  the  millions  of  pounds  spent  on  rail- 
ways in  that  country  to  realize  the  value  of  money  invest- 
ment as  a  pledge  for  future  trade. 

It  is  surprising  even  to  first  travelers  in  South  America 
to  note  the  way  in  which  foreigners  have  gained  a  foot- 
hold in  their  enterprises.  Why  do  not  the  South  Americans 
do  these  things  for  themselves,  one  asks.  "Why  call  in 
foreign  capital  and  foreign  leadership  in  relation  to  such 
enterprises  as  furnishing  hydro-electric  power  to  run  the 
tramways  and  light  plants  of  such  important  cities  as  Rio 
de  Janeiro  and  Sao  f*aulo?  Or  for  packing  house  plants 
in  Argentina  and  Brazil  ? 

Why  has  the  Peruvian  Corporation  with  its  British 
backing  gained  control  of  the  great  railway  systems  in 
Peru?  What  has  brought  American  capital  so  successfully 
to  invest  and  promote  large  nitrate  and  copper  interests 
in  Chile  and  Peru? 

The  answer  to  such  queries  lies  far  back  in  the  historical 
and  racial  background  of  South  America.  For  centuries 
this  country  lay  beneath  the  spell  and  control  of  medieval 
Spain  and  Portugal. 

The  Spaniards  and  the  Portuguese  of  the  sixteenth  cen- 
tury were  great  explorers,  hardy  adventurers,  and  born 
to  endure  hardships  of  the  severest  kind  on  sea  and  land. 
But  they  were  not  colonizers  as  were  our  early  American 
settlers.  Agriculture  and  the  routine  of  daily  toil  on  farms 
were  repugnant  to  them.  These  early  gentlemen  adven- 
turers, exploiting  chiefly  the  country's  precious  metals, 
caring  only  for  the  treasure  of  South  America  for  them- 
selves and  their  kings  in  the  old  country,  gave  South 
America  a  bad  start  as  far  as  internal,  national,  industrial 


WINNING  SOUTH  AMERICAN  TRADE  407 

and  agricultural  development  was  concerned.  Furthermore, 
the  natural  proclivities  of  the  Latin  race  for  politics,  for 
gentlemanly  pursuits,  for  the  literary  and  artistic  side  of 
life  were  encouraged  at  the  expense  of  training  in  the  prac- 
tical utilitarian  enterprises  primarily  needed  to  conquer  the 
land  and  to  erect  industrialism.  Consequently,  when  these 
states  threw  off  the  yoke  of  the  mother  countries  in  the 
earl}'-  days  of  the  nineteenth  century,  they  found  their 
republics  with  an  intelligent  and  cultured  class  at  the 
summit  of  society,  with  no  middle  class,  and  below  a  more 
or  less  ignorant  and  primitive  laboring  population  com- 
posed largely  of  Indians  and  mestizos,  with  many  negroes 
in  the  tropical  sections.  Altogether  the  population  was  like 
helpless  children  in  the  midst  of  their  riches  of  natural 
resources,  which  required  above  all  the  modern  arts  of 
science  and  modern  industry  to  unlock  their  treasures. 

It  was  natural,  therefore,  for  Latin  Americans  to  turn 
to  the  British,  to  the  Germans,  and  to  the  North  Americans, 
not  only  to  furnish  the  mechanical  appliances,  but  also  the 
means  and  the  men  with  which  to  establish  the  basic  founda- 
tions for  their  material  prosperity.  While  these  countries 
can  boast  of  great  patriots  like  Bolivar,  Valdivia,  San 
Martin  and  Bartolome  Mitre,  they  have  lacked  such  leaders 
as  Fulton,  and  Morse,  Edison,  and  Harriman.  To-day  in 
the  larger  republics  like  Peru,  Chile,  Argentina,  Brazil  and 
Uruguay,  investments  are  practically  as  safe  as  in  the 
United  States,  since  revolutions  of  any  moment  have  been 
conspicuous  by  their  absence  in  these  republics  for  many 
years.  The  $500,000,000  or  more  of  American  investment 
in  looms  to  South  America  may  well  be  doubled  to  the 
mutual  advantage  of  both  countries. 

The  opportunities  for  showing  South  Americans  that  we 
believe  in  them  and  want  their  trade  at  present  are  great 
and  none  of  them  more  important  than  the  opportunity  of 
large  American  combines  to  assist  these  South  American 
republics  in  a  financial  way,  taking  in  return  both  excellent 
security  and  the  promise  of  future  trade.  Markets  follow 
financial  investments. 


408       FOREIGN  TRADE  MARKETS  AND  METHODS 

Another  necessity  in  gaining  commercial  standing  in 
South  America  lies  in  the  realization  that  trade  must  go 
both  ways  between  the  northern  and  southern  portions  of 
this  continent.  South  America  has  invaluable  products  and 
raw  materials  to  send  to  us,  such  as  the  copper,  nitrates, 
and  animal  products  of  Chile;  the  wheat,  wool,  hides  and 
meat  products  of  Argentina,  Uruguay  and  Patagonia ;  the 
copper,  sugar,  cotton,  petroleum,  and  alpaca  of  Peru;  the 
tin,  silver,  and  other  minerals  of  Bolivia;  the  cocoa,  ivory, 
nuts,  hats  and  rubber  of  Ecuador;  the  rubber,  coffee,  tim- 
ber, sugar,  leather,  and  manganese  of  Brazil;  and  the 
cocoa,  coffee,  copper,  rubber,  hides,  bananas  and  metals  of 
the  northern  Caribbean  republics. 

In  return  these  nations  want  our  manufactured  products 
of  all  kinds.  They  need  our  agricultural  and  railway 
machinery,  our  chemical  products,  our  automobiles,  our 
electrical  appliances  and  tools,  our  industrial  equipments 
for  mills  and  factories,  and  also  our  technical  experts  and 
engineers  to  assist  in  the  construction  of  their  new  mechan- 
ical, agricultural  and  mining  establishments. 

There  was  never  such  an  opportunity  for  this  reciprocity 
of  trade  as  at  present  with  new  steamship  lines,  both  for 
passengers  and  cargo  down  the  West  Coast  between  New 
York  and  Valparaiso,  and  new  lines  of  ships  inaugurated 
down  the  East  Coast,  together  with  other  sailings  between 
New  Orleans  and  the  West  Indies  and  South  American 
Caribbean  ports,  and  to  the  Pacific  Coast  through  the 
Panama  Canal. 

The  British  follow  their  traditional  method  of  winning 
trade  by  sending  commissions  and  delegations  in  their  own 
ships  to  Chile  and  to  other  countries,  using  the  means  of 
friendly  acquaintanceship  between  business  men — a  tre- 
mendous leverage,  in  gaining  South  American  trade. 

It  must  be  remembered  also  that  sentiment  and  favorable 
regard  born  of  knowing  the  people  with  whom  we  trade  are 
vital  factors  in  securing  commercial  footholds  in  Latin 
America.  It  is  necessary  for  Americans  to  study  the  prob- 
lem of  what  South  Americans  want  from  us  quite  as  much 


WINNING  SOUTH  AMERICAN  TRADE 


409 


as  to  plan  what  we  want  to  sell  to  them,  if  we  expect  to 
build  up  a  strong,  permanent  foreign  business  with  these 
nations. 

Unless  South  America  as  well  as  North  America  prospers 
by  our  trade  relationships  we  cannot  in  the  long  run  be 
successful.  It  is  encouraging  to  note  that  our  import  as 
well  as  our  export  trade  with  South  America  has  been 
rapidly  increasing,  as  the  following  statistics  will  show. 


Total  value  of  merchandise  imported  from  and  exported  to 
South  America  by  the  United  States  during  September  and  the 
nine  months  ending  September,  1921,  compared  with  correspond- 
ing period  of  the  preceding  year: 

Month  of  September,  1921 


1921 

1920 

Imports 

S17,092,114 
13,913,116 

$62,534,534 

Exports 

54,470,689 

Nine  Months  Ending  with  September,  1921 

1921 

1920 

Imports 

$224,047,977 

228,485,942 

$637,608,910 

Exports 

431,552,496 

Twelve  Months  Ending  June  30. 

1913 

1921 

Imports   

$217,734,629 
146,147,993 

$483,249,987 

Exports 

523,450,650 

Allusion  has  alread}'  been  made  to  the  fact  that  the 
South  American  is  ruled  more  largely  by  sentiment  than 


410       FOREIGN  TRADE  MARKETS  AND  METHODS 

are  the  people  in  the  colder  climates  of  our  Anglo-Saxon 
land.  Feelings  lie  near  the  surface  in  Latin  America  as 
they  do  in  Japan.  Criticism  of  South  American  habits  of 
life  or  business  procedure  is  inimical  to  gaining  trade  with 
these  people.  Salesmen  and  advertisers  dealing  with  South 
America  should  remember  that  a^  a  rule  there  is  no  color 
line  among  these  republics  and  that  the  attitude  toward 
women  is  different  by  tradition  than  it  is  with  us. 

It  should  alsotbe  remembered  that  a  strong  Oriental  strain 
permeates  South  America,  having  been  inherited  from 
Moorish  ancestors  in  Spain  and  Portugal  through  the 
mingling  of  the  Moorish  races  with  those  of  the  Iberian 
Peninsula  for  upwards  of  eight  centuries. 

When,  therefore,  the  South  American  shudders  at  talk- 
ing business  with  the  brusque  directness  of  the  Northerner 
and  requires  politeness  and  gentlemanly  deportment  as  an 
introductory  means  to  talking  business  the  North  American 
will  do  well  to  fall  into  line,  and  ' '  when  in  Rome  do  as  the 
Romans  do. ' '  The  adaptability  of  the  Germans  has  greatly 
assisted  their  enterprises  in  winning  South  American  trade. 
They  have  studied  carefully  the  South  American 's  tempera- 
ment, his  wants  and  his  character.  They  have  learned 
Spanish  and  Portuguese  before  going  to  these  republics 
and  have  considered  seriously  the  question  of  the  "what" 
and  ' '  how ' '  of  South  American  business. 

If  the  North  American  manufacturer  or  exporter  in  send- 
ing his  agents  to  South  America,  or  in  his  first  letters, 
or  through  his  personal  contact  with  these  people  always 
will  keep  in  mind  the  necessity  of  putting  himself  in  the 
South  American's  place  and  securing  the  mental  point  of 
view  of  his  customer  he  will  seldom  have  difficulty  in  ob- 
taining business  or  conducting  it.  Half  of  the  trade  errors 
with  South  Americans  have  occurred  through  this  ina- 
bility or  inattention  on  the  part  of  American  business 
men. 

A  vital  essential  in  winning  Latin  American  trade  also 
resides  in  the  proper  adjustment  of  our  methods  of  busi- 
ness to  suit  the  Latin  American  desires  and  temperament. 


WINNING  SOUTH  AMERICAN  TRADE  411 

This  topic  is  hackneyed  enough,  but  so  long  as  we  are  losing 
South  American  trade  by  our  indifference  to  certain  details 
of  business  intercourse  and  procedure  it  is  a  subject  that 
must  be  considered. 

In  spite  of  the  enthusiastic  admiration  of  North  America 
by  South  Americans  by  reason  of  the  results  of  American 
participation  in  the  late  war,  the  most  recent  observations 
in  these  southern  republics  prove  that  no  amount  of  admira- 
tion and  sentiment  will  take  the  place  of  business  methods 
approved  in  South  America  in  winning  trade.  Business  is 
business  in  South  America  and  when  it  comes  to  economics 
the  South  American  will  favor  Germany,  France,  England, 
Japan,  or  any  other  country  which  caters  most  carefully 
to  his  national  demands  and  idiosyncrasies. 

The  situation  along  this  line  was  expressed  by  a  business 
man  returning  from  South  America  whose  views  were 
published  in  the  New  York  Times.  Among  other  things  he 
said: 

It  is  unfortunate  that  American  business  men  have  not  done 
all  they  should  have  done  to  follow  up  the  great  wave  of  admira- 
tion for  their  country  which  has  swept  over  South  America.  The 
total  volume  of  American  trade  with  South  America  is  greater 
than  it  was  before  the  war,  but  the  fact  remains  that  Americans 
have  not  been  able  to  hold  all  the  gain  which  the  war  brought 
to  them.  Importers  in  South  American  republics  have  turned 
again  not  only  to  Great  Britain  but  also  to  Germany.  This  is 
true  of  some  of  the  most  pro-Ally  business  houses  in  Argentina 
and  elsewhere.  It  means  that  German  methods  of  doing  business 
in  South  America  are  so  astute,  the  prices  quoted  by  German 
houses  so  low,  that  anti-Gennan  sentiment  is  all  too  frequently 
not  proof  against  the  hope  of  business  advantage.  Orders 
are  being  placed  by  South  American  houses  for  German  goods 
even  when  there  is  great  uncertainty  as  to  when  they  can  be 
deUvered. 

I  venture  to  predict  that  if  the  Germans  can  get  raw  materials 
they  will  get  back  90  per  cent  of  the  business  which  they  had  in 
South  America  before  the  war,  unless  they  are  met  by  American 
and  other  competitors  with  methods  like  their  own,  or  by  other 
methods  which  may  prevent  them  from  forging  ahead  by  applica- 


412       FOREIGN  TRADE  MARKETS  AND  METHODS 

tion  of  the  business  methods  which  have  served  them  so  well  in 
the  past.  You  have  no  idea  of  the  thoroughness  with  which  the 
Germans  work.  The  English  have  of  late  become  more  and  more 
formidable  competitors,  but  the  Germans  are  still  preeminent  as 
salesmen.  It  isn't  that  the  South  Americans  like  them  par- 
ticularly. They  don't.  They  simply  buy  where  the  buying  seems 
best. 

The  Germans  study  native  South  American  idiosyncrasies  with 
minute  care.  For  instance,  when  an  Argentine  merchant  becomes 
a  proud  father  the  German  merchant  with  whom  he  has  had 
dealings  loses  no  time  in  sending  him  a  card  of  congratulation. 
That  tickles  the  Argentine,  and  it  is  more  than  likely  that,  other 
things  being  equal,  it  will  dispose  him  kindly  toward  the  Teuton 
when  the  time  comes  for  placing  orders.  Some  Englishmen  are 
learning  how  to  do  that  sort  of  little  courtesy — but  how  many 
American  business  men  would  think  it  worth  while? 


The  business  methods  which  Americans  need  to  watch 
have  to  do  also  with  the  study  of  the  hours  of  doing  busi- 
ness in  South  America,  which  in  many  sections  are  quite 
ditferent  from  the  business  hours  in  the  United  States; 
salesmen's  methods,  requiring  far  more  courtesy  and  defer- 
ence than  at  home;  and  having  regard  for  "mail  days" 
when  calling  upon  customers  as  well  as  discarding  haste 
and  bustle. 

Legal  formalities  should  be  taken  up  with  the  American 
Consul  when  opening  business  houses,  branches,  or  agencies, 
together  with  an  effort  to  keep  out  of  Latin  American 
courts;  a  study  should  be  made  also  of  custom-house  fees 
and  procedures.  Banking  methods  most  desired  by  Latin 
Americans  should  be  studied,  never  forgetting  the  inevitable 
fact  that  South  Americans  require  credit,  packing  and 
prompt  attention  to  orders  from  us  equal  to  the  service 
they  have  been  accustomed  to  receive  from  European 
countries. 

Although  there  is  in  certain  republics  of  South  America 
some  jealousy  of  the  United  States  (los  yanquis)  there  is 
no  widespread  feeling  of  hostility  in  South  America  towards 
us.    On  the  other  hand,  we  believe  that  for  the  most  part 


WINNING  SOUTH  AMERICAN  TRADE  413 

there  is  a  decided  admiration  for  the  industrial  and  busi- 
ness efficiency  of  North  Americans. 

If  such  essential  points  as  the  foregoing  arc  emphasized 
by  our  exporters  and  manufacturers,  there  is  no  reason 
why  the  volume  of  trade  between  the  two  Americas  should 
not  mount  up  increasingly.  It  should  always  be  remem- 
bered, however,  that  to  win  South  American  trade  we  must 
consider  that  the  capture  of  South  American  markets  is 
dependent  upon  the  winning  of  the  South  American  heart 
and  his  respect,  as  well  as  the  buying  and  selling  of  goods. 
This  will  require  the  combined  best  efforts  and  thought 
of  the  manufacturer,  the  export  manager,  the  salesman 
and  the  advertiser.  Let  no  one  doubt,  however,  that 
this  combined  effort  will  pay  abundantly  in  future 
results. 


COMPAEATIVE  INFORMATION  RELATIVE  TO  THE 
EXPORT  AND  IMPORT  BUSINESS  OF  SOUTH 
AMERICA 

The  following  facts  reveal  the  general  trend  of  foreign 
trade,  together  with  the  leading  products  of  South  America, 
with  five  of  the  chief  nations  interested  in  commerce,  with 
these  republics  for  the  year  1917  (the  last  year  for  which 
reports  are  made  up  from  various  countries),  and  also  facts 
concerning  German  trade  with  South  America  for  the  pre- 
war year  of  1913. 

Figures  for  the  years  1918  and  1920  would  show  con- 
siderable increases,  but  the  general  comparative  ratio  of 
South  American  trade  with  the  countries  named  has  re- 
mained approximately  the  same.  As  to  the  year  1921,  there 
has  been  a  falling  off  in  both  the  export  and  import  trade 
of  South  America,  practically  with  all  of  the  countries 
named,  the  condition  of  money  exchange  working  certain 
hardships  to  the  trade  of  the  United  States  with  South 
America : 


414       FOREIGN  TRADE  MARKETS  AND  METHODS 


Argentina 

Exports:  Meat,  wheat,  flax,  com,  oats,  quebracho. 
Imports:  Foodstuffs,  iron  and  steel  manufactures,  oils  and  chem- 
icals. 

1917 


Imports  from 

Exports  to 

United  States 

$64,989,021 
39,056,403 
21,811,554 
25,421,356 

$156,432,641 

United  Kingdom 

156,021,608 
70,029,308 

France 

Italy 

27,883,227 

Germany . 


1913 

.1    $80,996,103 


$60,024,558 


Brazil 

Exports:  Coffee,  rubber,  cocoa,  sugar,  hides,  manganese. 
Imports:  Coal,  wheat,  steel  products,  paper,  cement. 

1917 


Imports  from 

Exports  to 

United  States 

$98,722,602 

37,713,580 

8,456,017 

4,152,127 

$130,987,909 

United  Kingdom 

35,817,290 
39,272,267 

France 

Italy 

22,950,693 

1913 
Germany I      $56,973,330 


$44,333,640 


WINNING  SOUTH  AMERICAN  TRADE 


415 


Chile 

Exports :  Nitrate  of  soda,  copper,  wool,  iodine. 
Imports:  Textiles,  coal,  steel,  explosives. 

1917 


Imports  from 

Exports  to 

United  States 

$63,534,755 

23,565,591 

5,152,006 

$155,006,103 
55,388,670 
11,657,554 

United  Kingdom 

France 

Italy 

1913 
Germany I      $29,578,138 


$30,830,378 


Bolivia 

Exports:  Tin,  rubber,  antimony,  copper,  tungsten. 
Imports:  Textiles,  steel,  breadstufifs,  explosives. 

1917 


Imports  from 


Exports  to 


United  States . . . 
United  -Kingdon 
France 


$4,355,285 

1,583,821 

286,400 


22,193,030 

35,225,550 

1,672,630 


1913 


Germany , 


$7,835,632 


$3,109,758 


416       FOREIGN  TRADE  MARKETS  AND  METHODS 

Peru 

Exports:  Sugar,  cotton,  copper,  wool,  oils. 
Imports:  Coal,  textiles,  wheat,  lumber,  meats. 

1917 


Imports  from 

Exports  to 

United  States 

S42,789,713 
9,415,047 
1,094,963 
1,210,333 

$53,251,224 

United  Kingdom 

18,457,861 

France 

425,629 

Italy 

Germany . 


1913 


$5,132,039 


$2,966,884 


ECUADOB 

Exports:  Cocoa,  panama  hats,  gold,  coffee,  hides,  ivory,  nuts. 
Imports:  Textiles,  foodstuffs,  machinery,  drugs,  hardware. 


1917 


Imports  from 

Exports  to 

United  States 

$5,942,502 

2,463,951 

325,081 

195,283 

$12,794,467 

United  Kingdom 

109,215 

France 

1,449,585 

Italy 

142,652 

Germany . 


1913 


$1,563,129 


$2,627,353 


WINNING  SOUTH  AMERICAN  TRADE 


417 


Colombia 

Exports:  Coffee,  gold,  bananas,  hides. 
Imports:  Textiles,  steel,  lumber,  machinery. 

1917 


Imports  from 

Exports  to 

United  States 

United  Kingdom 

$14,500,000 

7,000,000 

500,000 

400,000 

$30,000,000 
700,000 

France 

450,000 

Italy 

150,000 

Germany , 


1913 


$4,012,000 


$3,216,200 


Venezuela 

Exports:  Coffee,  cocoa,  balata,  hides,  gold. 
Imports:  Textiles,  drugs,  flour,  machinery. 

1917 


United  States . . . 
United  Kingdom . 

France 

Italy 


Imports  from 


$15,561,807 

3,654,582 

949,771 

279,915 


Exports  to 


$12,792,584 

1,143,004 

2,863,364 

280,000 


1913 


Germany I      $2,580,986 


$5,563,768 


418       FOREIGN  TRADE  MARKETS  AND  METHODS 


Uruguay 

Exports:  Wool,  meats,  hides. 

Imports:  Foodstuffs,  hardware,  naval  stores,  machinery. 

1917 


Imports  from 


Exports  to 


United  States. . . 
United  Kingdom , 

France 

Italy,,.., 


$20,177,054 

12,108,030 

2,401,088 

1,739,126 


$26,067,484 
19,224,545 
16,087,330 
14,648,873 


Germany , 


1913 


$8,076,714 


$13,807,580 


Paraguay 

Exports:  Hides,  yerba  mat6,  petit  grain,  quebracho. 
Imports:  Textiles,  foodstuffs,  machinery,  chemicals. 

1917 


Imports  from 

Exports  to 

United  States 

$1,515,604 

2,609,346 

473,687 

500,000 

$358,911 

58,953 

311,928 

321,575 

United  Kingdom 

France 

Italy 

1913 


Germany . 


$2,176,606 


$1,198,685 


WINNING  SOUTH  AMERICAN  TRADE 


419 


British  Guiana 

Exports:  Sugar,  rum,  balata,  rice. 

Imports:  Textiles,  flour,  fertilizers,  machinery. 

1917 


Imports  from 


Exports  to 


United  States. . . , 
United  Kingdom . 


$5,910,238 
4,560,978 


$770,519 
9,171,874 


French  Guiana 

Exports:  Cocoa,  phosphates,  gold,  hides. 
Imports:  Live  stock,  textiles,  provisions. 

1908 


Imports  from 


Exports  to 


United  States. 


$33,136 


$335,174 


Dutch  Guiana 
Exports:  Sugar,  rum,  cocoa. 

Total  South  American  Trade 
1917 


United  States ... 
United  Kingdom . 

France 

Italy 


Imports  from 


$325,222,313 

134,005,r43 

28,993,661 

33,898,140 


1913 


Exports  to 


$603,085,486 

303,114,645 

145,615,217 

68,177,022 


Germany |    $187,177,377    1    $163,913,870 


CHAPTER  XXIX 

CARRYING  AMERICAN  IDEALS  ALONG  THE  ROUTES  OP 
WORLD   TRADE 

No  undertaking  has  ever  succeeded  greatly  that  has  had  a 
merely  sensual  or  selfish  aim. — Emerson. 

Along  with  this  widening  of  the  American's  interest  in 
a  world-wide  activity  of  trade,  there  comes  the  inevitable 
possibility  of  carrying  his  ideals  with  his  ideas  around  the 
world.  Although  "business  is  business"  in  China  or  Brazil, 
as  it  is  in  New  York  or  Chicago,  nevertheless  the  personality 
of  the  business  man,  his  motives,  his  characteristics  and 
his  idealism — all  these  are  contagious  influences  and  are 
quite  sure  to  be  contributed  in  more  or  less  degree  to  those 
with  whom  he  enters  into  trade. 

What  can  the  American  contribute  through  his  idealism 
along  the  routes  of  foreign  commerce  ?  Is  there  something 
intangibly  subtle  and  vital  in  our  Americanism  that  is 
worth  while  to  be  passed  along  through  contact  with  other 
people?  If  we  gain  much  from  the  old  world  and  from 
Latins  and  Orientals,  do  we  not  also  have  the  privilege  of 
giving  much  of  that  peculiar  quality  which  has  always  set 
apart  the  American  and  made  him  in  the  minds  of  many 
peculiar  and  distinctive? 

' '  I  am  a  democrat  and  a  dreamer, ' '  were  the  words  with 
which  I  heard  one  of  our  prominent  American  foreign 
traders  characterize  himself.  He  was  the  head  of  a  large 
and  influential  firm,  closely  related  to  contemporary  life 
at  home,  and  interrelated  with  many  trade  lines  reaching 
out  to  the  ends  of  the  earth.  His  whole  career  had  been 
involved  in  a  myriad  of  business  interests  and  details  worlds 

420 


CARRYING  AMERICAN  IDEALS  ALONG  421 

removed,  as  it  would  seem,  from  the  land  of  dreams.  One 
would  have  called  this  man  successful,  practical,  and  highly 
efficient,  but  hardly  an  idealist,  yet  knowing  the  man 
intimately  would  prove  to  any  observer  that  he  was  an 
idealist — a  utilitarian  idealist. 

In  a  land  where  the  word  utility  is  ubiquitous,  and  in  an 
atmosphere  where  a  dreamer  is  supposed  to  be  a  visionary, 
the  union  of  the  two  in  one  individual  would  seem  at  first 
to  be  an  irreconcilable  anachronism.  I  believe,  notwith- 
standing, that  the  idealism  of  the  twentieth  century  Ameri- 
can is  a  very  real  thing,  and  that  it  has  never  been  more 
accurately  designated  than  in  a  phrase  written  by  Prof. 
John  R.  Commons  in  an  article  contributed  to  the  Inter- 
collegiate Magazine  in  1909 :  * '  Utilitarianism  is  the  democ- 
racy of  idealism." 

It  is  this  inexplicable  idealism  in  the  midst  of  the  prac- 
tical, the  marriage  of  the  imagination  with  modern  applied 
science,  the  secularizing  of  the  mind  and  the  human  spirit, 
and  the  bringing  out  of  dreams  into  the  light  of  a  demo- 
cratic day,  that  distinguishes  present  day  America.  No 
other  country  by  location  or  tradition  has  been  so  conducive 
to  the  drawing  out  of  a  useful  idealism,  or  to  making  the 
mystic  and  the  scholar  practical  and  serviceable  to  the 
community.  The  vast  distribution  of  wealth,  the  marvels 
of  scientific  exploration  and  industry,  surpassing  the  won- 
ders of  the  Egyptians,  the  strain  of  the  Puritan,  all  set 
in  an  atmosphere  of  democratic  obligation,  remarkable  busi- 
ness instinct  and  cooperation,  have  furnished  an  alluring 
and  enchanting  field  for  the  development  of  a  quality  of 
idealism  heretofore  uncommon  among  men. 

This  tendency  uniting  ideals  with  practice  and  bridging 
the  gulf  between  dreams  and  action  is  seen  in  a  hundred 
ways,  and  it  is  far  more  general  than  is  usually  appreciated. 
The  word  spiritual,  for  example,  is  rapidly  losing  its  former 
pious  significance,  and  is  becoming  naturalized  in  the  society 
of  other  words  connected  with  the  higher  nature  of  man  in 
his  everyday  life.  American  religion  must  not  simply  be 
good,  it  must  be  good  for  something.    We  are  not  so  much 


422      FOREIGN  TRADE  MARKETS  AND  METHODS 

inelin,ed  to  say  "The  Beautiful  and  the  Good,"  but  with 
Goethe,  "The  Beautiful  is  the  Good."  The  scientist  for 
a  time  seemed  to  be  getting  the  best  of  the  humanist  and 
the  scholar,  but  there  are  abundant  evidences  at  present  of 
the  secularizing  of  all  education  and  attaching  the  specialist 
in  the  theories  of  economics,  politics,  and  social  and  applied 
science  especially,  to  the  chariot  wheels  of  modem  govern- 
ment, modern  business  and  modem  philanthropy. 

Indeed  the  shuttle  runs  back  and  forth  with  remarkable 
swiftness  and  ease  between  the  real  and  the  ideal  worlds. 
Ideals  in  the  loftiest  reaches  of  democracy,  the  purification 
of  political  life,  both  in  the  nation  and  municipality 
and  in  the  honest  conduct  of  trade,  are  becoming  regnant 
without  the  reformers  and  the  reformed  recognizing  them 
as  ideals.  They  often  masquerade  under  the  guise  of  ' '  good 
government"  or  "good  business."  Ideals  of  regulation  in 
business  and  trade  and  the  inter-relation  of  vast  corporate 
interests  which  were  like  the  political  party  platforms  be- 
fore election  of  twenty-five  years  ago  (counsels  of  perfec- 
tion to  be  edited  but  not  executed),  have  in  these  days 
come  so  near  actualization  that  even  the  sins  of  the  fathers 
are  being  visited  upon  the  children  of  "big  business." 
When  the  laws  for  correction  and  reform  of  abuses  in  trade 
and  organized  occupations  do  not  come  fast  enough,  we 
form  commissions  to  investigate,  and  from  the  inexorable 
searchlights  of  these  latter  idealizing  bodies  nothing  and 
no  one  is  exempt,  from  the  biggest  insurance  company  to 
the  biggest  revivalist,  and  what  the  investigators  miss  in 
details  of  depravity  the  newspapers  supply. 

These  utilitarian  ideals  are  in  fact  about  the  most  com- 
mon and  prominent  things  amongst  us  at  present.  As  they 
sweep  the  ranks  of  society  we  do  not  always  call  them 
ideals.  As  a  nation  we  abhor  the  trail  of  pharisaism  and 
the  semblance  of  piety.  We  idealize  our  character  under 
the  head  of  "standards  of  conduct,"  or  "respectability," 
but  it  is  fairly  safe  to  say  that  there  is  no  place  on  God's 
footstool  where  moral  ideals  of  conduct  are  more  universally 
respected  or  where  the  absence  of  them  is   more    fatally 


CARRYING  AMERICAN  IDEALS  ALONG  423 

blighting  to  reputation  or  success  than  in  the  United 
States. 

Strange  as  it  may  seem,  it  is  in  the  person  of  the  Ameri- 
can business  man,  practical,  level-headed,  all  business,  that 
this  current  of  the  ideal  is  clearly,  often  most  clearly,  seen. 
His  big-heartedness  is  often  in  proportion  to  his  blunt 
directness.  Get  a  bit  below  the  surface  and  you  will  find 
frequently  a  nature  steeped  in  sentiment. 

At  the  call  of  distress,  either  at  home  or  abroad,  his 
purse  strings  are  loosened  with  a  prodigality  that  marks 
the  fanatic.  In  his  business  office  he  may  be  as  austere 
as  the  statue  of  Memnon,  but  in  his  home  or  in  company 
of  his  friends  he  is  as  fun  of  idealistic  feeling  and  often 
of  romanticism  as  the  East  Indian  schoolboy. 

The  average  American  man  of  affairs,  as  soon  as  he  gets 
past  the  persiflage  of  group  conversation  to  his  heart-to- 
heart  talk  with  you  in  quiet,  will  lead  you  to  the  little 
holy  of  holies  of  his  own  personal  ideals,  to  some  fine  worth 
while  issue,  without  which,  notwithstanding  his  dollars, 
his  sky  scrapers,  and  his  automobiles,  he  would  be  poor 
indeed. 

This  vision  seen  in  and  through  his  work  is  the  only 
thing  that  makes  the  American's  inveterate  toil  something 
else  than  drudgery.  Save  to  the  aged  clerk  with  his  silver 
hair,  and  those  destined  followers  in  the  race  of  life  whose 
duties  are  the  bars  of  habit,  work  in  America  is  not  a 
"squirrel's  wheel."  The  English  Wesley  once  said,  "I 
can  plod."  The  American  says,  **I  can  plod  if  I  can  see 
something  ahead  to  plod  for." 

In  this  country  of  vast  dreams  and  huge  fulfillments 
idleness  is  a  rusty  sword  in  the  soul,  but  work  that  has 
no  point  to  it  turns  the  iron  round,  and  is  even  more 
excruciating.  The  resiliency  of  the  American  spirit  is 
proverbial.  It  is  born  of  hilltop  visions  of  work  that 
is  profitable  to  do,  of  new  empires  beyond  the  sea  to 
conquer,  the  endeavor  that  gets  one  on. 

Everything  must  be  charged  with  a  more  or  less  useful 


424       FOREIGN  TRADE  MARKETS  AND  METHODS 

idealism.    A  business  man  said  to  a  clergyman,  who  urged 
him  to  join  his  church, 

If  there  is  anything  I  can  do  that  will  really  count,  I  will  come 
in,  but  I  don't  want  to  joia  the  church  just  to  sit  around  and 

sing. 

The  United  States  is  pDobably  the  most  distasteful  atmos- 
phere imaginable  for  the  man  without  a  "job";  it  is  also 
almost  a  prison  house  to  the  man  who  feels  that  his  job 
is  not  worth  while.  It  is  this  intuitive  sense  that  he  has 
taken  hold  of  a  great  work  that  explains  much  of  the 
American's  enthusiasm  and  unquenchable  buoyancy.  Dr. 
Eliot  is  reported  to  have  said  at  one  time  concerning  Mr. 
Roosevelt,  that  he  had  never  ''grown  up."  Was  it  not, 
however,  in  that  ever-renewed  idealism,  in  the  pushing 
power  of  undisillusioned  youth,  as  mighty  as  it  is  at  times 
mistaken,  in  that  resistless  energy  bom  of  new  a-nd  unful- 
filled dreams  of  human  progress,  that  our  late  ex-President 
typified  the  American  spirit?  Utilitarian  idealism  is  the 
reign  of  a  high  ideal  in  the  midst  of  useful  labor.  It  ia 
doing  a  practical  thing  with  a  spiritual  motive. 

It  was  with  this  thought  of  the  ideal  penetrating  the  real 
in  the  American  temperament  that  we  asked  a  prominent 
manufacturer  engaged  in  sending  his  products  the  world 
around,  what  he  considered  to  be  the  "leading  business 
ideal"  of  the  American.  "The  leading  business  ideal?" 
The  manufacturer  slowly  repeated  my  question  after  me. 
He  had  just  returned  from  a  month  of  travel  among  the 
branches  of  the  firm  in  the  Middle  West,  and  it  seemed  an 
opportune  time  to  get  from  him  a  comprehensive  answer. 
He  placed  his  cigar  on  the  corner  of  his  desk  and  his  eye 
followed  down  the  lofty  corridor  of  skyscrapers  that  dark- 
ened William  Street: 

In  a  word,  I  sTiould  say,  the  square  deal — ^both  wajrs. 

This  man  who  answered  my  question  was  not  an  apostle 
of  "big  business";  he  was  not  a  socialist;  he  was  not  a 


CARRYING  AMERICAN  IDEALS  ALONG  425 

dreamer.  He  was  a  typical  business  man  of  moderate 
means  as  fortunes  in  America  go  to-day,  and  possessed  with 
perhaps  somewhat  more  than  the  average  thoughtfulness. 
He  was  of  native  stock,  without  hyphen  in  his  name  or  his 
nature,  a  self-respecting  citizen  and  householder.  He  was 
the  kind  of  man  who  helps  to  form  the  great  national 
vertebra  of  the  United  States. 

Was  this  popular  statement  of  democracy  something  the 
man  had  inherited?  "Was  it  a  part  of  that  more  or  less 
loosely  arranged  sentiment  of  equality  that  floats  all  too 
frequently  in  the  atmosphere  of  the  countiy?  "What  was 
behind  the  statement?  "What  did  he  mean  by  **the  square 
deal"? 

Square-dealism  is  coming  to  mean  a  very  real  thing  in  the 
United  States,  something  far  more  useful  and  practicable 
than  a  lawyer's  glittering  generality.  To  the  college  boy 
it  means  that  clean  athletics  and  clean  scholarship  and  clean 
living  are  fai;  more  likely  to  bring  him  recognition  and 
honor  among  his  fellows  than  their  opposites,  and  that 
trickery  and  dissipation  that  were  passed  off  as  cleverness 
and  marks  of  manliness  twenty-five  years  ago,  now  stamp 
him  as  an  undesirable  in  college  and  load  him  with  an 
oppressive  heritage  for  a  start  in  business  or  professional 
life.  To  the  congressman  sustained  .by  a  rising  public 
opinion  in  morals  of  states,  the  square  deal  has  meant  the 
repeal  of  the  Panama  Canal  bill,  in  the  interests  of  a  square 
deal,  not  for  ourselves  simply,  but  also  for  our  national 
neighbors.  To  the  modem  self-respecting  business  man 
it  has  meant  an  increasing  ambition  to  be  well  thought  of 
by  one's  business  associates,  both  at  home  and  abroad,  to 
gain  and  to  hold  creditable  standing,  and  to  maintain  one's 
self-respect  in  the  world  of  affairs.  To  the  tradesman  it 
signifies  the  reputation  for  just  dealing,  to  give  for  a  dollar 
a  dollar's  worth,  and  the  growing  belief  that  to  make  a 
customer  is  better  than  to  make  a  sale. 

A  real  estate  man  put  the  matter  thus : 

Most  men  desire  to  live  so  that  other  men  say,  'His  word  is  as 


426      FOREIGN  TRADE  MARKETS  AND  METHODS 

good  as  his  bond/  Most  of  the  men  I  know  prefer  to  have  other 
men  think  of  them  as  good  rather  than  clever.  They  may  desire 
to  merit  both  of  these  qualifications  attributed  to  them,  but  would 
prefer  the  former. 

The  friends  of  the  late  Charles  Frohman  stated,  with 
justifiable  pride  in  their  associate,  that  a  contract  was  never 
necessary  between  him  and  his  workers,  that  Frohman 's 
word  was  sufficient. 

These  ideals  of  square  business  dealing  which  have  be- 
come more  and  more  a  fact  in  the  United  States,  need  to 
be  applied  more  rigorously  than  ever  before  to  all  matters 
involved  in  foreign  trade.  It  has  been  too  often  the  fact 
that  methods  of  business  conducted  upon  strict  integrity 
at  home  have  not  been  so  easy  to  carry  to  foreign  lands. 
The  fact  of  distance  has  seemed  to  complicate  the  code  of 
morals  of  business  men  and  this  is  not  true  simply  of 
Americans.  For  example  during  the  business  depression 
of  1920,  the  matter  of  cancellations  of  goods  and  the  look- 
ing out  for  number  one,  sometimes  regardless  of  legitimate 
trade,  were  characteristics  of  certain  firms  not  simply  of 
one,  but  of  many  nations.  In  this  new  day  of  world-wide 
industrial  and  commercial  interchange  of  thought,  of 
products,  and  of  life  in  general,  there  should  be  no  stoppage 
of  right  ideals  and  right  codes  of  business  at  shore  lines. 
A  deal  that  is  illegitimate  and  crooked  in  domestic  trade 
should  be  considered  unjustifiable  in  foreign  trade.  On  the 
other  hand,  every  bit  of  progress  which  has  been  made  to 
make  these  business  relationships  clean  and  straight  at 
home,  should  be  carried  along  the  routes  of  commerce 
wherever  our  business  activities  go. 

America  is  coming  of  age  in  a  period  of  unexampled 
opportunity  in  world  affairs.  Her  fancied  isolation  has 
been  rudely  shattered.  The  present  world  conflict,  with  its 
earth  shaking  influences,  by  its  tremendous  effect  upon 
our  economic,  industrial  and  emotional  life,  already  has 
awakened  the  nation  at  a  destined  moment  to  the  fact  that 


CARRYING  AMERICAN  IDEALS  ALONG  427 

we  can  no  longer  exist  on  a  continent  apart,  but  that  wo 
have  become  by  the  arbitrament  of  time  and  tragedy  of 
circumstance  a  part  and  parcel  of  world  responsibility. 
America  is  summoned  to  cultivate  an  aptitude  for  altruism 
in  her  young  manhood,  and  her  future  as  a  great  or  small' 
civilization  hangs  upon  her  present  choice.  Henceforth, 
if  we  are  to  make  the  gift  of  our  forefathers — that  sacred 
deposit  of  freedom — meaningful,  we  must  be  ready  with 
foresight  and  wisdom  heretofore  unsummoned  to  take  our 
burden  of  world  obligation,  as  well  as  to  prepare  to  care 
for  the  enlarging  interests  that  are  our  own.  Whether  busi- 
ness ideals  and  business  interest  which  are  particularly 
American  shall  be  carried  through  such  influences  as  a 
League  of  Nations,  a  plan  of  disarmament,  through  our 
diplomatic  or  consular  representatives,  or  through  those 
trade  ambassadors  who  reach  even  more  intimately  every 
part  of  the  earth,  the  main  issues  persist — shall  we  make 
world  trade  a  part  and  parcel  of  domestic  trade  in  that 
the  same  standards  of  equity  and  justice  shall  be  present 
whether  the  American  is  dealing  in  Madagascar,  Shanghai, 
Valparaiso  or  New  York? 

Our  fathers  brought  to  our  shores  from  Europe  in  their 
frail  sailing  ships  a  precious  endowment  with  which  to 
inform  and  to  actuate  the  young  republic.  They  were  the 
ideals  of  political  and  religious  freedom.  These  ideals  have 
not  yet  been  fully  perfected  in  our  hands,  but  they  have 
been  fostered  and  extended  in  a  legion  of  ways  among  our 
ovm  citizenship  as  well  as  among  those  who  have  sought 
homes  on  our  shores.  These  ideals  have  permeated  all  our 
institutions.  They  have  made  an  atmosphere  for  American 
hopes  and  American  enterprises.  We  of  to-day  may  be 
called  upon  in  the  new  morning  of  America '.s  maturity,  in 
the  very  dawn  of  her  spiritual  strength,  a.s  the  unhostile 
representatives  of  her  wealth  and  insight,  to  send  back  to 
Europe  and  the  old  world  this  priceless  spirit  of  idealism, 
not  in  the  terms  of  battleships,  but  in  the  language  of 
prosperity  and  trade,  not  wearing  the  insignia  of  military 


428       FOREIGN  TRADE  MARKETS  AND  METHODS 

conquest,  but  clothed  in  the  garments  of    peaceful    and 
legitimate  business. 

"O  mighty  Lord  of  Trade's  high  running  sea 

Grant  us  an  ehco  of  that  distant  main  .  .  . 
Beyond  dark  waves  of  danger  to  attain 
The  coast  of  Courage,  strand  of  Bravery. 

Grant  an  assurance  and  a  hope  more  free, 
That  over  stiller  waters  we  may  gain. 
At  length,  a  vaster  vision,  not  in  vain. 

Of  Thine  eternal  opportunity. 

Prepare  a  highway  in  this  wilderness  of  wanton  ways 

of  traffic  .  .  . 
A  new  heart  of  love  and  law  and  justice  in  the  mart; 
A  loftier  view  of  commerce,  limitless  .    .    . 
That  sees  therein  no  end  Thou  wouldst  not  bless 
No  consummation  other  than  Thou  art." 


INDEX 


Advertising,  export,  its  neces- 
sity   and    how     accom- 
plished, 41  ff. 
foreign    advertising    courses, 

107. 
periodicals  to  utilize,  243. 
Africa,  commerce  with  the  U. 
S.,  333  ff. 
description  of  markets,  333, 

347. 
South,  bibliography  of,  121. 
diamond    and   gold   mines 

of,  345. 
economic    conditions    and 

resources,  338  ff. 
papers  and  periodicals  as 

advertising  media,  247. 
structure   of   country,   cli- 
mate and  resources,  338. 
Agriculture,   tractors   and   mo- 
tors   required    in    Near 
East,  330. 
Ainscough,  T.  M.,  British  trade 
commissioner,    compares 
American     and     British 
trade  in  India,  298. 
Algeria,    resources    and    com- 
merce, 338. 
work  of  France  in,  338. 
All  America  Cables,  Inc.,  cable 

lines  and  rates,  158  ff. 
Ambassador,  British,  to  Con- 
stantinople, quoted  rela- 
tive to  Turkish  charac- 
teristics, 309. 
Ambassadors  and  Ministers, 
functions  and  services 
described,  250  ff. 


American    Chamber    of    Com- 
merce, in  China,  272. 
in  Egypt  and  in  Gi-eece,  332. 

American    Foreign    Trade,    di- 
rect exporting,  22  ff. 
the  export  manager,  24  ff. 

American  Ideals,  carried  along 
routes  of  world  trade, 
420,  424. 

American  Locomotive  Co., train- 
ing employees,  66  ff, 

American  Tobacco  Co.  in 
China,  281. 

American  Trade,  the  commis- 
sion house,  20. 

American  Trading  Co.,  training 
employees,  68. 

American       traits       analyzed, 
422  ff. 
traits  contrasted   with   Eng- 
glishmen,  379, 

Argentina,  British  investments 
in,  363. 
exports  and  imports  of,  114. 

Armour  and  Co.,  training  em- 
ployees, 82  ff. 

Arnold,  Julian,  suggests  trade 
exposition  and  products 
needed  in  China,  279. 

Arnold.  Matthew,  quoted,  315. 
quoted    regarding    the   East, 

307. 
relation  to   American   traits, 
369. 

Asia,  can  trade  westernize  her, 
307  ff. 

Asia,  Magazine,  carrying  ar- 
ticles on  China,  82. 


429 


430 


INDEX 


Atlantic  RefiniDg  Co.,  training 
employees,  67  ff. 

Austin,  0.  P.,  statistician,  con- 
cerning U.  S.  manufac- 
tures, 2. 

Australasia,  newspapers  and 
periodicals  as  advertis- 
ing media,  247. 

Australia,  bibliography  of,  121. 
resources  and  markets,  367  ff. 
sheep,  cattle  and  mineral 
products,  368. 

Austria-Hungary,  amount  of 
foreign  trade  with  U.  S., 
386. 

Automobiles,  required  in  Near 
East,  330. 

Baltic,    American    trade    with 

Finland,     Poland,    etc., 

386. 
Banana,  the  land  of  the,  396  ff. 
Banks,    for    financing    foreign 

trade,  171. 
National  City  Bank,  172. 
Baroda,  Gaekwar  of,  installing 

cinematograph  machines, 

295. 
Belgian  Congo,  description  of 

country    and    products, 

346. 
products  and  exports,  345  &. 
Belgium,  work  in  Congo  Free 

State,  346. 
industrial    development     of, 

and  trade  with  America, 

386  ff. 
Billings,  Josh,  quoted,  39. 
Bland,  J.  0.  P.,  relative  to  Jap- 
anese conditions,  261. 
Bolivia,    leading    products    of, 

export  and  import,  415. 
Bolshevism,  in  Russia,  349. 
Boston  University,  courses  and 

plan    used    in    foreign 

trade  preparation,  81. 


Boutroux,  Emile,  of  the  French 
Academy,     quoted    con- 
cerning  French   charac- 
teristics, 225. 
Brazil,    cable    communications 
with,  155. 
exports  and  imports,  414. 
press  of,  35  ff. 
products  of,  408. 
British    Colimibia,    forest    re- 
sources, 365. 
British    Guiana,    exports    and 

imports,  419. 
Britishers,       contrasted      with 
Americans  in  character- 
istics, 370  ff. 
traditional  conservatism,  378, 
understanding  of,  a  necessity 
for  trade,  369. 
Bulgaria,        immigration        to 

United  States,  331. 
Bureau  of  Foreign  and  Domes- 
tic Commerce,  57. 
quoted  concerning  trade  with 

India,  301. 
supplying    late    information 
and  statistics,  347. 
Burroughs  Adding  Machine  Co., 
training  salesmen,  93  ff. 
Business  firms,  training  for  for- 
eign commerce,  61  ff. 

Cables,  All  America  Cables, 
Inc.,  connections  and 
rates,  158  ff. 

art  of  using  cables,  165. 

cables  owned  by  nations,  170. 

construction  of,  148. 

Inter-American,  149. 

list  of  cable  companies  con- 
necting with  Latin- 
America.  152  ff. 

ownership  of  cables  lines, 
155. 

privately  owned  submarine 
cables,  168. 


INDEX 


431 


Cables,  the  nerves  of  foreign 

trade,  146  ff. 
Canada,  agricultural  and  forest 
resources,  365. 
bibliography  of,  121. 
imports  and  exports,  366  ff. 
markets  with,  364  ff. 
Caribbean  markets,  391  ff. 
Central    America,    inhabitants 
and  labor,  399. 
trade  with  the  U.  S.,  395. 
Chambers  of  Commerce,  Amer- 
ican, in  China,  272. 
in  South  Africa,  341. 
in  the  Levant,  325, 
services  of,  176. 
Chase  National  Bank,  interest 

of,  in  China,  283. 
Chile,  bibliography  for  foreign 
trade  study,  118. 
cable    communications    with, 
156  ff. 
Chilean   business  man  quoted, 
38. 
principal    exports    and    im- 
ports, 415. 
China,     Chinese     students     in 
France,  279. 
craze  to  learn  English,  185. 
high-class  Chinese  quoted,  38. 
imports  from  United  States, 

277. 
progress  and  reaction,  316. 
resources   and    language   re- 
quirements, 195. 
selling  motor  trucks  to,  30. 
strengthening  American  trade 

with,  271  ff. 
trade  with  America,  276. 
transportation  in,  278. 
China  Trade  Act,  outlined  in 
report     of     Mr.     Dyer, 
273  ff. 
C.I.F.  and  other  foreign  trade 
terms    defined    and    ex- 
plained, 213. 


Commission  house,  described, 
20  ff. 

Commons,  John  R.,  quoted,  421. 

Consuls,  American,  duties  out- 
lined, 253  ff. 

Corse,  Frederick  M.,  reasons 
for  trade  failure  in 
Russia,  356. 

Cotton,  Egyptian,  326. 

Courses  suggested  for  foreign 
trade  preparation,  105. 

Credits,  foreign,  how  arranged 
and  wisdom  of,  175  ff. 

Cuba,  agricultural  and  indus- 
trial wealth  and  markets, 
392  ff. 

Czecho-Slovakia,  trading  with 
U.  S.,  386. 

Darwin,  Charles,  quoted  re- 
garding successful  life 
work,  55. 

Decalogue,  of  foreign  salesmen, 
39,  40. 

Department  of  the  Interior, 
Wash,  D.  C,  training 
for  foreign  commerce, 
70  ff. 

Dewey,  Prof.  John,  describes 
Chinese,  282. 

Diplomatic  and  Consular  Serv- 
ice, work  outlined  and 
described,  250  ff. 

Direct  exporting,  explained, 
22  ff. 

Dollar,  Robert,  regarding  oper- 
ation of  ships,  134. 

Drum,  John  S.,  quoted  on  in« 
vestment,  9. 

Du  Pont  de  Nemours  Export 
Co.,  concerning  training 
for  foreign  commerce, 
74  ff. 

Dutch  East  Indies,  books  de- 
scriptive of,  120. 

Dutch  Guiana,  exports  of,  419. 


432 


INDEX 


Dyer,  Mr,,  of  House  of  Rep- 
resentatives, regarding 
China  Trade  Act,  272  ff. 

Eastman  Kodak  Co.,  training 

employees,  80. 
Ecuador,  chief  exports  and  im- 
ports of,  416. 
Edge  Act,  advantages  for  for- 
eign banking,  403. 
Edison,  Thomas,  quoted  regard- 
ing genius,  54. 
why  popular  in  U.  S.,  371. 
Education,  American  schools  in 
Near  East,  327. 
Egyptian  schools,  334, 
English  public  schools  train- 
ers   of    British    traders, 
381. 
in  Philippines',  289. 
Japanese  literacy,  296. 
Edwards,  Amelia  B.,  describes 

Egyptians,  335. 

Egan,    Dr.    Maurice    Francis, 

connection    with    treaty 

for  Virgin  Islands,  252. 

Egypt,  character  and  progress, 

333  ff. 

exports  and  imports  to  and 

from  U,  S.,  326. 
new     industrial     order     of, 
335. 
Emerson,  quoted,  51,  420. 

on  foreign  countries,  369. 
England,       achievements       in 
Egypt,  331. 
commerce  with  Russia,  350. 
influence  on  the  East,  313. 
Europe,  suggested  bibliography 
for  foreign  trade  study, 
114  ff. 
trade  with  the  new,  385  ff. 
Evans,  Henry,  regarding  ma- 
rine insurance,  138. 
Exchange,   dollar   exchange  in 
Near  East,  325. 


Exporting,  direct  exporting  ex- 
plained, 22  ff. 
the  export  merchant,  17  ff. 
things  to  be  kept  in  mind,  6. 
Export  ti'ade,  a  necessity,  52. 
Export    trade    papers,    impor- 
tance   as    foreign   trade 
media,  245. 

Fang,  Dr.  Wu  Ting,  quoted  rel- 
ative to  Chinese  nature 
and  tendencies,  284. 

Far  East,  The,  bibliography 
for  foreign  trade  study, 
117  ff. 
newspapers  and  periodicals 
as  advertising  media, 
248. 

Farrell,  James  A.,  specific  sug- 
gestions for  handling 
shipping  arrangements, 
134  ff. 

Financing,  Great  Britain  past 
master  in  credits,  etc., 
364. 

Ford,  L.  C.  and  Thomas  F., 
quoted  relative  to  Eng- 
land's world-wide  invest- 
ment trade  policy,  363. 

Foreign  Exchange  and  Bank- 
ing, bibliography  of, 
122  ff. 

Foreign  Trade,  actual  example 
of  procedure  of  for- 
eign trade  financing, 
181  ff. 
American  commerce  com- 
pared with  British  in 
India,  298,  299. 
American      commerce     with 

Russia,  348  ff. 
American,   historical   growth 

of,  127. 
American    industrial   exhibit 
suggested      for      China, 
279. 


INDEX 


433 


Foreign  Trade,  American  trade 
with  Africa,  333  ff. 

begins  with  resources  at 
home,  11. 

buying  agencies  of  American 
firms  in  Near  East,  328. 

cancellation  of  contracts, 
426. 

Caribbean  markets,  391  ff. 

commerce  of  U.  S.  in  rela- 
tion to  other  nations, 
13. 

commerce  with  Bulgaria,  Ser- 
bia, Roumania,  Southern 
Russia  and  Persia, 
331  ff. 

comparative  export  and  im- 
port business  with  South 
America,  413. 

cooperation  needed,  10. 

correspondence,  47. 

credit  vs.  cash  policy,  175  ff. 

definition  of  foreign  trade 
terms,  205  ff. 

doing  busines  with  the  new 
Europe,  385  fif. 

East  Indian  markets,  295  &. 

far-sighted  policy  of  Eng- 
land, 360. 

financing  of,  171  ff. 

general  bibliography,  122. 

how  foreign  shipments  are 
paid  for,  credits,  etc., 
173  ff. 

knowledge  of  export  business 
required,  12. 

knowledge  of  foreign  peoples 
required,  4. 

requirements  of,  1  ff. 

resources  and  markets  United 
Kingdom  of  Great  Brit- 
ain, Canada  and  Aus- 
tralia, 359  ff. 

rules  for  foreign  traders  in 
India,  304,  306. 


Foreign  Trade,  salesmanship  as 
a  career,  28  ff. 

"slow  siege"  the  better  plan 
in  China,  284. 

South  African  commerce,' 
341,  342. 

suggested  papers  and  period- 
icals for  advertising  in 
foreign  lands,  246  ff. 

three  ways  of  payment  for 
goods  sent  to  foreign 
lands,  179. 

training  for,  51  ff. 

understanding  English  char- 
acteristics important, 
369,  ff. 

United  States  selling  to  Rou- 
mania, 331. 

wide  vision  required,  54. 

with  British  Guiana,  imports 
and  exports  of,  419. 

with  China,  271  fe. 

with  Dutch  Guiana,  exports 
of,  419. 

with  French  Guiana,  lead- 
ing products  for  export 
and  imports,  419. 

with  Japan,  259  ff. 

with  Philippines,  286  ff. 

with  South  America,  402  ff. 
Foreign  Trade  Financing  Cor- 
poration, to  assist  Amer- 
ican foreign  commerce, 
404. 
Foreign  trade  terms,  F.O.B.  and 
other  terms  explained, 
208. 

standardized    definitions    of, 
205  ff. 
Foreign  trade   training,  books 
and     encyclopedias    for 
reading,  58. 

preparing  for  work  in  Chile, 
103. 
Fowler,  John  F.,  quoted,  17  ff. 


434 


INDEX 


France,  advantageous  posiiaon 
in  Near  East,  329. 
agricultural    and    industrial 
development    and    mar- 
kets, 387,  388. 
colonizing  in  Algeria,  338. 
importance    of    French    lan- 
guage in  commerce,  187. 
lang-uage    in    Near     East, 

329. 
leading  papers   and   period- 
icals    for     advertising, 
248  ff. 
Franklin,     Benjamin,     quoted, 

101. 
Freeman,  Kenneth  J.,  writes  of 

Eastern  culture,  336. 
French    Guiana,    exports    and 

imports  of,  419. 
Frohman,      Charles,     business 
contracts,  426. 

Galsworthy,  John,  interprets 
English  traits,  372. 

General  Motors  Export  Co., 
training  employees,  72  fl. 

Georgetown  University,  student 
training  for  foreign  ser- 
vice, 71  &. 

German,  eonamereial  impor- 
tance of  German  lan- 
guage, 194. 

Germany,  exports  of,  385,  386. 
trade  with  Russia,  350,  351. 

Goethe,  quotations,  28,  422. 

Grace  Brothers  (India)  Ltd., 
customs  of  doing  busi- 
ness in  India,  303,  304. 

Grace  Log,  kind  of  trade  ar- 
ticles used,  226. 

Grace,  W.   R.  &  Co.,  evolved 
from  commission  house, 
21. 
ofiBces  and  trade  in  Africa, 

347. 
.training  employees,  63  ff. 


Great  Britain,  in  Africa,  333. 
in  India,  296. 
shipbuilding  progress,  132. 
Greece,    American   exports   to, 
326. 
amount  of  trade  with  U.  S., 
386. 
Guaranty  Trust  Co.,  in  Latin 
Ajnerica,  8. 
investment  in  foreign  coun- 
tries, 9. 
training    and    welfare    work 
for  employees,  75  ff. 

Haiti,  chief  exports  of,  395. 

Haldane,  Lord,  on  relation- 
ships between  Germany 
and  England,  369,  370. 

Hammond,  C.  E.,  discussion  of 
foreign  credit  depart- 
ments, 176  ff. 

Hart,  Sir  Robert,  relation  to 
trade  in  China,  285. 

Harter  Act,  regarding  obliga- 
tions of  a  S.  S.  Co.,  139. 

Harvard  University,  courses 
for  foreign  training,  85. 

Heck,  Lewis,  American  Consul 
regarding  import  and 
export  trade  with  Near 
East,  323,  324. 

Herodotus,  quoted  on  Egypt, 
333,  334. 

Hoover,  Herbert,  quoted,  29. 

House  organs,  difficulties  con- 
fronting    house    organs 
narrated    by    American 
firms,  235. 
distribution  and  budget,  234. 
editor   and    editorial    policy, 

228  ff. 
for  advertising  purposes,  49. 
object  and  policy   described 
by     representatives     of 
American  business 

houses,  221  ff. 


INDEX 


435 


Houston  Post,  quoted  coneem- 
ing  fruit  business  in  Cen- 
tral America  and  U.  S., 
400,  401. 

Hughes,  Charles  E.,  Secretary 
of  State,  statement  rela- 
tive to  trade  with  Rus- 
sia, 348,  349. 

Hughes,  Edward  R.,  explains 
marine  insurance  clauses, 
140  ff. 

Idealism,    American,    seen    in 

trade,  25  ff. 
Importing,  things  to  be  kept  in 
mind,  6. 
{See  Foreign  Trade.) 
India,    American    trade    with, 
295  ff. 
bibliography  of,  120. 
characteristics     of    Asiatics, 

310  ff. 
description  of  races  and  so- 
cial and  business  habits, 
301. 
influence    of   war   on   trade, 

297. 
lack  of  hurry,  304. 
students'  desire  to  learn  Eng- 
lish, 185. 
IngersoU,   Robert   H.   &   Bro., 
language      study       and 
training   for   employees, 
86. 
Insurance,    marine,    bibliogra- 
phy relative  to,  124. 
International   General   Electric 
Co.,  training  employees, 
69  ff. 
Investments,  American,  in  new 
productive     enterprises, 
171. 
English     in     America,     362, 

363. 
opportunities   for,  in   South 
America,  405. 


Italian,  where  language  is  used 
in  commerce,  195. 

Italy,  markets  and  resources, 
388. 

Japan,   bibhogxaphy    for    for- 
eign trade  study,  118  ff. 
character    of    products    ex- 
ported from,  268. 
difficulty  of  competition  with 

U.  S.,  267. 
imports  and  exports,  264. 
increase  of  shipbuilding,  132. 
land  holding  by  Americans, 

318. 
learning  English,  186. 
markets  with  the  U.  S.,  259  ff. 
trade  progress  in  India,  299, 

300. 
war     trade     with     Belgian 
Congo,  347. 
Jefferson,   Thomas,  re  naviga- 
tion, 125  ff. 
Johannesburg,    great    building 

progress,  343. 
Johnson,  Samuel,  quoted,  12. 
Jowett,  master  of  Baloil,  quoted 
on  English  traits,  374. 

Kahler,  Hugh,  quoted  regard- 
ing advertising,  44. 

Kipling,   Rudyard,    quoted   on 
Africa,  333. 
relative  to  hurry  in  the  East, 

304. 
concerning  team  play,  10. 

Kitchener,  Lord,  in  Egypt,  314. 

Korea,  books  descriptive  of, 
119. 

Labor,  problems  of,  in  Japan, 

261  ff. 
in  Philippines',  291. 
Lamont,  Thomas  W.,  regarding 

Japan's  problem,  260. 
Languages,      bibliography     of 


436 


INDEX 


books  in  various  com- 
mercial langTiages  as 
helps  for  acquring  speak- 
ing knowledge,  197  ff. 

Languages,  commercial  impor- 
tance of  and  advantages 
of  knowing,  185  ff. 
commercial     languages     and 
trade  vocabularies,   103. 
necessity   for  learning  Rus- 
sian, 358. 
three   most    important    com- 
mercial languages,  187  ff. 

Latin  America,  cable  facilities 
to,  152  ff. 

Literature  and  study  courses, 
101  ff. 

Livingston,  quoted,  333. 

Locke,  John,  quoted,  46. 

Lowell,  James  Russell,  quoted, 
221. 
quoted  concerning  industrial 
work,  290. 

Lumber,  in  Philippines,  7. 

McCutcheon,  George  Barr,  char- 
acter of  Americans,  26. 

McKinley,     President,     quoted 
relative  to  annexing  the 
^      Philippines,  292. 

Manufactures,  American,  break- 
ing world's  record,  2  ff. 

Marine  Insurance,  bibliography 
relative  to,  124. 
described  and  common  insur- 
ance   clauses    explained, 
138  ff. 

Marine  Underwriters,  138. 

Mears,  Elliott  S.,  regarding 
employment  of  local 
salesmen  in  the  Levant, 
192  ff. 

Mediten-anean  ports,  American 
trade  with,  386. 

Merchant  Marine,  America, 
125  ff. 


Mesopotamia,  oil  fields  of,  329. 

Mexico,  her  national  wealth, 
391,  392. 

Mining,  American  money  in- 
vested in  Mexico,  392. 

Missionaries,  hindered  at  times, 
318. 
paving  way  for  trade  in  Near 

East,  321. 
point   of  view   of,  in   Asia, 
309. 

Mohammedans,  in  Indian  trade, 
302,  304. 

Murray,  Prof.  Gilbert  of  Ox- 
ford, contrasts  mental 
traits  of  English  and 
American  students,  383. 

Napoleon,    quoted    concerning 

difficulties,  55. 
National  Cash  Register  Co., 
field  instructions  for  for- 
eign trade,  98  ff. 
National  City  Bank  of  N.  Y., 
example  of  procedure  in 
a  foreign  trade  transac- 
tion, 181  ff. 

in  Latin  America,  8. 

number  of  branches  and  ser- 
vices rendered  abroad, 
172. 

training  for  banking  service 
in  foreign  branches, 
90  ff. 
National  Foreign  Trade  Coun- 
cil, information  for 
training,  57  ff. 

makes  standard  definitions  of 
foreign      trade      terms, 
205  ff. 
Near  East,  the,  American  trade 
in,  321  ff. 

bibliography  for  study  of 
foreign  trade,  117. 

the,  Japanese  representatives 
in,  329. 


INDEX 


437 


Near  East,  the,  oil  fields -of,  329. 
work  of  American  committee 
for  relief  of,  328. 

Newspapers  and  periodicals  as 
foreign  trade  buildei-s, 
238  ff. 
the  American  press  in  its  re- 
lation to  Latin  American 
news,  238  fe. 

Nixon,  Lewis,  re  merchant  ma- 
rine, 128. 

Norton,  Edward  J.,  consul,  on 
public  informatoin,  sug- 
gestion for  business  lead- 
ers' training  for  Rus- 
sia, 357,  358. 
outlines  work  of  American 
Consular  service,  252  ff. 

Okuma,  Marquis,  statement  rel- 
ative to  Japan's  prog- 
ress, 262. 

Orient,  modernizing  herself, 
319. 

Oxford,  Union,  miniature  Eng- 
lish world,  373,  374. 

Packard  Motor  Car  Co.,  train- 
ing in  business  practice, 
93. 

Panama  Canal,  advantage  for 
Pan  -  American         com- 
merce, 405. 
Canal  bill,  425. 

Pan-American  Union,  literature 
of,  113. 

Paraguay,  products  for  export 
and  import,  418. 

Pasha  Tewfik,  dislike  of  Brit- 
ish, 315. 

Pennsylvania,     University     of, 
*84fe. 

Persia,  trade  of,  332. 
trade  with  U.  S.,  332. 

Peru,  leading  exports  and  im- 
ports, 416, 


Philippines,   books   descriptive 
of,  119  ff. 
friars'  lands,  289. 
influence    of    home    politics 

upon,  292. 
labor  problems,  291. 
principal  exports  of,  288. 
trade  possibilities  and  indus- 
trial progress  of,  286  ff. 
trade  schools  and  education, 
289  ff. 
Plato,  quoted,  205. 
Porto  Rico,  products  of,  395. 
Portugal,    foreign    trade    with 

U.  S.,  390. 
Portuguese,  importance  of  lan- 
guage and  where  used  in 
commerce,  191  ff. 

Quebec,  largest  producer  of 
wood  pulp,  365. 

Raleigh,  Sir  Walter,  re  over- 
seas trade,  125. 

Railways,  in  Russia,  353,  354. 

Religion,  Asiatic,  312,  313. 
Christianity  in  India,  319. 

Richardson,  H.  K..,  regarding 
American  business  part- 
nerships with  Chinese, 
282. 

Robert  College,  Engineering 
School  of,  327. 

Rochefoucauld,  Francois  Due 
de  la,  quoted,  185. 

Root,  Elihu,  analyzing  South 
Americans  and  their 
trade,  402. 

Roumania,    agricultural    pros- 
perity and  oil  fields,  331. 
natural  resources,  331. 

Ruskin,  John,  quoted,  53. 

Russia,  American  commerce 
with,  348  f£. 

Russia,  living  conditions  and 
social  customs,  357,  358, 


438 


INDEX 


Russia,  national  wealth  and  re- 
sources, 352,  353. 
southern,    natural    resources 
and  minerals,  331. 

Russian,  language  of,  and  rea- 
sons for  acquirement, 
193  ff. 

Salesmanship,   decalogue   of  a 
foreign  salesman,  39  ff. 
foreign,  28  ff. 

language     requirements     of, 
192  ff. 
San  Domingo,  imports  and  ex- 
ports of,  395. 
Sanger,  J.  W.,  trade  commis- 
sioner, reports  of,  110. 
Scandinavia,  press,  dailies  and 

weeklies,  249. 
Seamen's  Act,  need  of  radical 

changes  in,  134. 
Serbia,  markets  of,  331. 
need    of   manufactured    and 
finished  articles,  331. 
Shaw,  W.   C,  quoted,  charac- 
teristics    of     successful 
salesman,  29. 
Shedd,  Dr.,  book  of,  229. 
Sheep  raising  in  Australia,  368. 
Shipping,  American,  125  ff. 
American    shipping   increas- 
ing, 15. 
England's    preeminence    be- 
fore war,  359. 
in  principal  countries,  132. 
Italian  flag  in  Near  Eastern 

waters,  329. 
Japanese,  265. 
lack    of,    to    Near    Eastern 

ports,  324,  325. 
losses    of,     through     World 

War,  131. 
maritime  leader  required,  136. 
Shipping,  necessity  of,  7  ff. 
new    S.    S.    lines    to    South 
America,  408. 


Shipping,   principal  books  re- 
lating to,  123  ff. 

world's  merchant  steam  ton- 
nage, 129  ff. 
Silver,  one  of  Mexico's  princi- 
pal exports,  392. 
Singer  Sewing  Machine  Co.,  in 
China,  281. 

successes  abroad,  16. 
Snider,  Dr.  Guy  Edw.,  selling 
in  foreign  markets,  107. 
South  America,  cable  communi- 
cations with,  156  ff. 

characteristics  of  people, 
410  ff. 

comparison  export  and  im- 
port business  of  differ- 
ent republics,  413  ff. 

foreign  leadership  in  busi- 
ness enterprise,  406. 

necessity  for  investing  cap- 
ital in,  405. 

newspapers  and  periodicals, 
238  ff. 

new  steamship  lines,  408. 

Panama  Canal  assisting  Pan- 
American  trade  activ- 
ities, 404. 

reciprocal  trade  necessary, 
408. 

trade  with  U.  S.  in  1920-21, 
409. 

winning  her  trade,  402  ff. 
South    American,    books,    de- 
scriptive and  industrial, 
111. 

trade  with  the  U.  S.  before 
the  war,  16. 
Spain,    influence    upon    South 
America,  406. 

manufactures  and  markets, 
389. 

Spanish  lan^age,  in  what 
countries  used,  require- 
ments for  commerce, 
188  ff. 


INDEX 


439 


Standard  Oil  Co.,  foreign  trade 
successes  of,  16. 
in  China,  281. 
on  training  employees,  62  ft. 

Stevenson,  Robert  L.,  on  Eng- 
lish affectation,  373. 

Sugar,  Cuba,  "the  world's 
sugar  bowl,"  393  ff. 

Sun  Yat  Sen,  his  plan  for  rail- 
ways in  China,  316. 

Syracuse  University,  classes  and 
instruction  for  overseas 
trade,  96  ff. 

Taft,  ex-President,  quoted,  1. 

Tariff,  legislation  1920,  405. 

Telegraphy,  radio,  used  to  sup- 
plement cable  facilities, 
146  ff. 

Tennyson,  quoted,  250. 

Texas  Co.,  The,  training  em- 
ployees, 93. 

Timber  industry  in  Russia,  354, 
355. 

Times,  N.  Y.,  quoted  relative  to 
North  American  meth- 
ods in  South  America, 
411,  412. 

Townsend,  Meredith,  compares 
Asia  with  Europe,  308. 

Training,  bibUography  in  train- 
ing   for    foreign    com- 
merce, 111  ff. 
business   firms    training    for 
foreign  commerce,  61  fP. 
for  foreign  commerce,  51  ff. 
preparation  needed  for  trad- 
ers   with    Russia,    356, 
357. 
questions  necessary  for  for- 
eign traders  to  answer, 
56. 
subjects  for  outline  courses, 

106  ff. 
vocational  study,  helpfulneee 
of,  60  ff. 


Travel,  Englishmen  and  Ameri- 
cans contrasted,  373, 376. 
Travelers,    campaign    for,    to 

South  America,  241. 
Turkey,  American  colleges  in, 
322. 
commerce  with  U.  S.,  386. 
condition  of  Turkish  money, 

330. 
trade  possibilities  with  U.  S., 

327. 
Turkish  oflBcial  characterized, 
309. 

United  Fruit  Co.,  developing 
Central  America,  379  ff. 

United  Kingdom  of  Great  Brit- 
ain, exports  and  imports 
with  U.  S.,  361,  362. 
markets  with,  359  ff. 

United  States,  commerce,  13  ff. 
natural  resources,  coal,  cot- 
ton, etc.,  52. 

United  States  Shipping  Board, 
129. 

United  States  Steel  Corpora- 
tion, foreign  service 
classes  for  training,  85  ff. 

University  of  Virginia,  prepar- 
ing business  men  for 
Latin  American  service, 
95  ff. 

Uruguay,  cable  communications 
with,  158. 
leading  exports  and  imports 
of,  418. 

Vedder,  Geo.  C,  qualifications 
of  export  manufacturer, 
24  ff. 

Venezuela,  chief  imports  and 
exports,  417. 

Wars,  influence  on  trade,  1  ff. 
Waterman,  L.  E.,  Co.,  training 
employees,  87. 


440 


INDEX 


Webb  Bill,  along  lines  of  need, 
10. 
help    to    foreign    commerce, 
403. 

Webster,  Daniel,  re  commerce 
on  the  sea,  125. 

West  Indies,  391  ff. 

books  descriptive  of,  121  ff. 

Westinghouse  Electric  and  Mfg. 
Co.,  educational  and 
technical  training  for 
foreign  commerce,  87  ff. 

Wharton  School,  preparing 
students  for  foreign 
trade  service,  84  ff. 


Wheat,  Russia  as  Europe's 
gi'anary,  355. 

WUliam  and  Mai-y,  College 
of,  subjects  and  books 
used  in  training  stu- 
dents for  foreign  trade, 
71. 

Wood  pulp,  Quebec,  largest 
producer  of,  365. 

Wool,  the  important  product  in 
Australia,  368. 

World  responsibility,  427. 

Wyman,  Walter  F.,  quoted  rel- 
ative to  successful  letter 
writing,  47  ff. 


(1) 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

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